Feds to Sue banks over fraudulent mortgages responsible for crisis

[Skylar1]

NEW YORK (CNNMoney) -- More than a dozen banks are expected to face lawsuits from a federal housing agency accusing them of misrepresenting the value of mortgage-backed securities.
The news, reported by The New York Times and Wall Street Journal, comes a day after the Federal Reserve sanctioned Goldman Sachs over questionable practices in one of its former mortgage units.


The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, is getting ready to sue Goldman Sachs (GS, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Deutsche Bank (DB) among others, according to the reports.
The bank stocks were all lower after the market open, along with the plunging stock market, which was being dragged down by an anemic job report.


Freddie Mac and Fannie Mae, which were bailed out by the U.S. government in 2008, have lost billions of dollars over the mortgage mess.
The FHFA, JPMorgan, Goldman Sachs and Bank of America declined to comment to CNN. The other banks have not yet responded to requests for comment.
"The suits, which are expected to be filed in the coming days, stem from subpoenas the finance agency issued to banks a year ago," wrote Deutsche Bank analysts Jim Reid and Colin Tan, in a note to investors. "It seems that there is little end in sight for the sector as far as negative news is concerned."

full article: http://money.cnn.com/2011/09/02/news...suit/index.htm

ah, this should prove an interesting watch, this is a long time coming.

[Nanobyte]

Why is that whenever something bad happens, they always have to blame someone? Everyone screws up sometimes.

[Wio]

Most of those banks wouldn't exist without the federal reserve and the bailouts. The problem isn't that they're greedy, but that the government establishes an environment where they can make garbage loans and profit.