U.S. Is Set to Sue a Dozen Big Banks Over Mortgages.

[elleng]

The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.

The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

http://www.nytimes.com/2011/09/02/business/us-is-set-to-sue-dozen-big-banks-over-mortgages.html?_r=1&hp

[RickFromMN]

1. Forgive me. I won't cheer until I know the details of these suits and the terms of settlements.

I wouldn't be surprised if the settlements are a pittance,
and protects the banks against any other litigation or future punishment.

[gordianot]

2. How about prosecute?

[Fearless]

3. Sounds like the feds are afraid of something coming out and want to have something to point at

to say they tried.