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U.s. Is Set To Sue A Dozen Big Banks Over Mortgages

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

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.

If this happens it's going to get very interesting watching the bankers squirm. Still I'm sure the Fed will settle any settlement.

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It was open knowledge incomes were being inflated, applications were being falsified and the driver - the banks themelves - selecting number hitters for loan arrangement and also for appraising the values of homes.

Everybody involved the the mortgage market from top to bottom knew.

Edited by OnlyMe

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http://www.nytimes.c...es.html?_r=1

If this happens it's going to get very interesting watching the bankers squirm. Still I'm sure the Fed will settle any settlement.

Looking at it another way

I spy with my LITTLE EYE City Lawyers about to fill their pockets on another one-way-bet on the City merry-go-round

(the bankers who got their billions in bonuses have mostly retired out of the way and public view!)

The lawyers should be unleashed on & forced to go after THEIR wealth if they want any remuneration for the lawsuits!

Give the banksters something to think about!

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Only about 5 years too late!

Am I the only one noticing that Bank of America and Bad News are going hand-in-hand rather more than is healthy these days? It seems they need to find $90bn from somewhere to maintain their current positions, and now they've been slapped with an $18bn lawsuit. I'd be inclined to stand a safe distance from this one.

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No point suing banks as the money will simply come from yet another bailout, a.k.a. Johnny Taxpayer.

We need to stop with all this helping out the stupid people nonsense. Same with all this PPI stuff over here, if they were stupid enough to sign up for the deal then let them live with a lighter wallet for it.

We are indeed 'all in it together' and fooker is sinking fast...

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What I find odd is that I had always thought that the GSE's had as a policy, deliberately bought bad paper of the US banks as part of a state sponsored effort to keep those banks solvent. Everyone knew that they were dumping rubbish onto the US taxpayer.

So why have they suddenly changed tack and are going to sue the US banks? Given the power of the Banking Lobby over there, I bet that this never reaches court. Of course if it does, then there really isnt an excuse for not having criminal prosecutions. After all this is about fraud.

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I can't believe no one has posted this story yet.... so they probably have. Merge if necessary.

I heard it first on the radio today and thought "yes". Could this be the way to hit the banks for their fraud?

U.S. will sue banks over sour mortgage securities

NEW YORK (AP) – The U.S. government is planning to sue some of the country's largest banks over mortgage-backed securities they sold that lost value in the housing market collapse, according to published reports Friday.

The reports say the government would seek to be compensated for billions of dollars in losses. The government says the banks misrepresented the quality of the securities. The reports cited people that were not identified.

The New York Times and The Wall Street Journal say the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac, could file a lawsuit within days.

The reports say securities that were backed by subprime and other risky loans but were rated as safe investments by ratings agencies are at issue in this case.

USA Today link

BBC

NY Times

Edited by Darkman

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One of the interesting aspects of this move to me is the idea that courts are the highest bodies in the land. And the government and banks are equals.

As a sovereign the US government could simply order the banks to pay back what it felt it was scammed out of. It reminds me of how planning approvals go to the courts even after the regulatory body has given approval.

The sovereign needs to be able to take action. Like when the Kingdom of Saudi Arabia decides it is putting a natural gas plant in an area, you dont' see citizens launching private lawsuits against it, and then the sovereign backing down.

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Only about 5 years too late!

Am I the only one noticing that Bank of America and Bad News are going hand-in-hand rather more than is healthy these days? It seems they need to find $90bn from somewhere to maintain their current positions, and now they've been slapped with an $18bn lawsuit. I'd be inclined to stand a safe distance from this one.

Also from RBS, HSBC and Barclays

1. Ally Financial Inc. f/k/a GMAC, LLC - $6 billion

2. Bank of America Corporation - $6 billion

3. Barclays Bank PLC - $4.9 billion

4. Citigroup, Inc. - $3.5 billion

5. Countrywide Financial Corporation -$26.6 billion

6. Credit Suisse Holdings (USA), Inc. - $14.1 billion

7. Deutsche Bank AG - $14.2 billion

8. First Horizon National Corporation - $883 million

9. General Electric Company - $549 million

10. Goldman Sachs & Co. - $11.1 billion

11. HSBC North America Holdings, Inc. - $6.2 billion

12. JPMorgan Chase & Co. - $33 billion

13. Merrill Lynch & Co. / First Franklin Financial Corp. - $24.8 billion

14. Morgan Stanley - $10.6 billion

15. Nomura Holding America Inc. - $2 billion

16. The Royal Bank of Scotland Group PLC - $30.4 billion

17. Société Générale - $1.3 billion

http://globaleconomicanalysis.blogspot.com/2011/09/is-it-acceptable-to-present-196-billion.html

So far UK bank exposure is 30.4+6.2+4.9=$41.5B or 41.5/196=21.1% of total

Just for comparison, RBS total income for 2010 was £32.6B, and UKFI estimates that total UK taxpayer investment in RBS as of 31/3/11 is worth only £36.97B

Edited by matroskin

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  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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