Blacknbengal
Well-Known Member
Report: Feds to sue big banks over mortgage losses
The agency that oversees the nation's two largest sources of mortgage capital is preparing to sue 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, The New York Times reported late Thursday.
The suits by the Federal Housing Finance Agency are expected to seek billions of dollars in compensation. The suits, expected to be filed in federal court in the coming days, are aimed at JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Deutsche Bank (DB) and others, The Times said.
The agency is the regulator for mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC), which foundered in 2008 as the subprime mortgage crisis nearly brought the U.S. financial system to its knees.
The suits stem from subpoenas the finance agency issued to banks a year ago. If the cases are not filed Friday, sources told The Times, they 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 the nation's securities laws 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://money.msn.com/market-news/post.aspx?post=a7ae879b-f1f9-4856-b281-3f747fa8ee23
The agency that oversees the nation's two largest sources of mortgage capital is preparing to sue 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, The New York Times reported late Thursday.
The suits by the Federal Housing Finance Agency are expected to seek billions of dollars in compensation. The suits, expected to be filed in federal court in the coming days, are aimed at JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Deutsche Bank (DB) and others, The Times said.
The agency is the regulator for mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC), which foundered in 2008 as the subprime mortgage crisis nearly brought the U.S. financial system to its knees.
The suits stem from subpoenas the finance agency issued to banks a year ago. If the cases are not filed Friday, sources told The Times, they 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 the nation's securities laws 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://money.msn.com/market-news/post.aspx?post=a7ae879b-f1f9-4856-b281-3f747fa8ee23
