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Senior Contributor

Government Sues Banks Over Risky Mortgages

Hopefully the Calvary has finally shown up at last.  

 

 

This from NPR last Friday:

 

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.

Home mortgage-backed securities were risky investments that collapsed after the real-estate bust and helped fuel the financial crisis in late 2008.

In the lawsuits that were filed in federal or state court in New York and the federal court in Connecticut, the government said the securities were sold with registration statements and prospectuses that "contained materially false or misleading statements and omissions."

The Federal agency said the banks and mortgage lenders also falsely represented that the mortgage loans in the securities complied with underwriting guidelines and standards. They also included representations "that significantly overstated the ability of the borrower to repay their mortgage loans."

The 17 institutions are Ally Financial Inc., formerly known GMAC LLC, Bank of America Corp., Barclays Bank PLC, Citigroup Inc., Countrywide Financial Corp., Credit Suisse Holdings Inc., Deutsche Bank AG, First Horizon National Corp., General Electric Co., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co. and its unit First Franklin Financial Corp., Morgan Stanley, Nomura Holding America Inc., The Royal Bank of Scotland Group PLC, and Societe Generale.

8 Replies
Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

they'll lose in court-file for bankruptcy- and we the taxpayer will bail them out-AGAIN. a great idea

Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

they'll lose in court-file for bankruptcy-and we the taxpayer will have to bail them out AGAIN- a great plan

Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

Our Democratic administration just wants to let them proceed with business as usual. The Attorney General has it as an obvious priority.

 

Where is the GOP outrage?  

 

Barry Goldwater and his generation would have called for their executives being shot at sunrise and extracting every penny from their estates and holding their descendant perpetually liable. Who is calling the shots in the Grand Old Party anyhow? 

 

Dag...you and Sam are the only people on the near or far right here who have ever acknowledged this mere existence of this situation. The rest are following bagger marching orders passed on from down high from "Koch and Forbes world". In that set of dogma, any trouble with the banks has only come from unscrupulus and devious people of inferior extraction born of nature who tricked honest and non-suspecting conservative bankers into loaning them excessive if not exhorbitant amounts of  money  on inferior properties.

 

Thanks

Highlighted
Senior Advisor

Re: Government Sues Banks Over Risky Mortgages

Bruce, it would have been sooooooo simple that it is even arguable. There should have been NO BAILOUT before Enron type hearings into why it was needed and where the money was going to go. Toooooo much time has now passed and the documents have been shredded.

Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

TARP and the subsequent funding had only nominally anything to do with what Dag posted about and what a mere handful here have been discussing off nad on for the past couple of years. 

 

And those earings, which I agree should have been held would most likely not have addressed it. The eventual Crisis Committee hearings were held and more or less did not and to teh degree thqat they did either whitewashed or dismissed.

Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

why dont they go after Geithner fornot paying tax, and barney frank-he was chairman over fannie, and the good congressman from new york for the condos in the carabbean or how about the funny picture taker or the funny old man in the bathroom stall or who-the-hell else that is a crook in d.c. ? no they go after TV ratings so we will forget about everything else. i want to puke

Highlighted
Advisor

Re: Government Sues Banks Over Risky Mortgages

Sure they should go after Geithner.  I'm all for it. He's a huge part of the problem.

 

The GSEs are also part of it. They should be looked into extensively. Which they have been. of course, incessently and extensively, by the political right. Upon which they find the corrupt banks. Which are among and primarily  their benefactors upon which they back off.

 

Follow the moves of the plutocrat fake winger hack Rep Issa of CA. He'll give you a road map.

Highlighted
Senior Contributor

Re: Government Sues Banks Over Risky Mortgages

And rightly so.  They should be able to recover the billions these mongrels cost the US citizens, through your government.  Standard and Poors should also be included in this.  They were the ones who rated some of the scam loans as AAA and vigorously persued dimwits to take them out.  Then they have the audacity to downgrade the US to AA+ when Obama is left carrying the can for the fat cats in downtown NY.  Sue the guts out of them and make them repay some of the stimulus money they got.