Great news -Feds sue biggest US banks over risky mortgages

[malaise]

http://www.palmbeachpost.com/money/feds-sue-biggest-u-s-banks-over-risky-1814919.html?cxntcid=breaking_news
<snip>
In a sweeping move, the government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.

Among the 17 targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.

The lawsuits were filed Friday by the Federal Housing Finance Agency which oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.

The total price tag for the securities bought by Fannie and Freddie affected by the lawsuits: $196 billion.

The government didn't provide a dollar amount of how much it seeks in damages. It said that it wants to have the purchases of the securities canceled, be compensated for lost principal and interest payments as well as attorney fees and costs. The lawsuits allege the financial firms broke federal and state laws with the sales.

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[Broderick]

1. Will it take taxpayer money to bail out the banks when the

penalties are issued? They need to arrest the wrongdoers.

[malaise]

2. I assume that arrests will follow

This is great news

[coalition_unwilling]

3. I assume you're being facetious about arrests? This is civil

litigation, not criminal and there has been no referral to the U.S. Department of Justice for criminal investigation that I am aware of. I might wish it were so, but a wish in one hand . . . :)

[Dokkie]

7. They would just offset the penalties

with tax cuts. Isnt that how they were able to pay off some the TARP money. Other ways they did this

- Having access to FED discount window - borrow at 0.0065% and load to the tax payers at 15%
- Selling their toxic mortgage assets to the FED

[aquart]

4. Shocking.

[sad sally]

5. Will the smell of bank bailouts be in the air? You know they're gonna' start to cry

about being treated unfairly.

The biggest banks are already negotiating with the attorneys general of all 50 states to address mortgage abuses. They are looking for a comprehensive settlement that will protect them from future litigation and limit their potential mortgage litigation losses.

[Broderick]

6. They will be fined

and the taxpayers will be paying the bill, because our banker friends can't possibly be required to give up one of their vacation homes, or their yachts.

So in essence, I think there is a strong possibility that the federal government is suing the American people. This needs to be criminally investigated.

[malaise]

8. LOL

:evilgrin:

[Justina For Justice]

9. Or Could Be Preparation for a Global-Sized Sell-Out.

When I first read about these lawsuits, I was elated to think that, finally, we were getting some needed action to hold these damn bankster crooks accountable for their massive crimes.

Then, I had a worrying thought: The Obama administration's hope for a global wrist-pat to the banksters is being stymied by New York Attorney General Eric Schniederman, who is refusing to agree to the Iowa Attorney General' s proposal to settle all the claims against the big banks, prior to virtually any investigation, for a paltry sum and simultaneously protect them from the huge liabilities they face from fraudulent foreclosures and equally fraudulent packaging and sales of their mortgage-backed securities to unwitting investors. Schneiderman's opposition to the proposed settlement would likely kill it. Obama has been trying, so far unsuccessfully, to force Schneiderman to cave.

Now we see the federal government sue almost all the big banks who caused the fraud. Could this be a pre-emptive strike on the part of the Obama administration. Sue them all, then settle them all on similar terms to that being considered by the Iowa Attorney General and his coalition of other state attorney generals?

I certainly hope not. It would be nice, if for once, the Obama administration would hold the banksters liable for crashing our economy, rather than giving them trillions of dollars to bail them.