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

[ClarkUSA]

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 stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims.

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.

http://www.nytimes.com/2011/09/02/business/us-is-set-to-sue-dozen-big-banks-over-mortgages.html

[kaiden]

1. Prayze Jeebus.

[Frustratedlady]

2. About time. Don't bail them out when they fail, either. EOM

[vaberella]

3. They will have to. I live in New York. JP Morgan Chase literally owns us.

You don't bail them out, New York goes under for a period of time which affects the entire nation since places like Oklahoma gets our taxes. It's a mess how intricately tied banks are to States.

[brentspeak]

6. .

[vaberella]

8. Okay you know nothing about New York politics in the 70s/80s & how we got fucked by Volkner & Koch.n

[brentspeak]

4. A civil suit, resulting in a trivial token settlement

With the settlement designed to inoculate the banks from future criminal liabilities for past deeds.

The fix remains firmly in.

[Enthusiast]

7. "The fix remains firmly in."

Yes it does. This little smoke screen doesn't change a thing.

[woo me with science]

10. This is the correct answer. nt

[Number23]

5. DAMN glad to hear it. Thanks, Clark!

Rec

[flpoljunkie]

9. FHFA seeking reimbursement for $30 billion in losses on the securities held by Fannie and Freddie

from your link...

[Phx_Dem]

11. And all the idiots who bought homes that were WAY over valued should be included.

My husband and I are shopping for an investment property and let me tell you there are TONS and TONS of condos and townhouses that are in foreclosure because idiots paid ricicluous amount of money for them -- like $350K for an 1,100 sf. condo that has ceramic tile and no granite counters. We look them up on the County Accessors site to see their value and see what the previous own paid and it's absolutely mind bloggling. No wonder they went into foreclosure.

[Supersedeas]

12. Americans deserve a Mortgage Payment Holiday

[Tx4obama]

13. Kick! n/t