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Thread: FEDS sue BANKS ??

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    Olympic Champ r.payton@att.net's Avatar
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    Default FEDS sue BANKS ??

    SO MUCH for ''the BUSINESS OF AMERICA IS BUSINESS''


    Feds sue biggest US banks over risky mortgages

    Federal agency sues 17 firms including BofA, Goldman over sales of risky mortgage investments











    FILE - In this July 13, 2010 file photo, Bank of America's headquarters are shown in Charlotte, N.C. The government has sued the nation's largest banks, along with a handful of other financial institutions and executives, for violating federal and state laws in the sale of home mortgage-backed securities. Among the 17 institutions targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs. (AP Photo/Chuck Burton, File)

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    Pallavi Gogoi and Eileen Aj Connelly, AP Business Writers, On Friday September 2, 2011, 5:59 pm
    NEW YORK (AP) -- 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.
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

  2. #2
    Olympic Champ RYou's Avatar
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    Default Re: FEDS sue BANKS ??

    Of the $196 billion, the feds are seeking rescission of about $900 million. The remainder are considered stable loans.

    Where will the cash go if any gained? To help some of those that have loan issues reduce the principle. The banks will counter that the FMae and FMac were sophisticated buyers and knew the risks.

    The issue will result in a settlement for probably about 25 cents on the dollar and not enough to be meaningful in any way shape of form.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

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    Olympic Champ r.payton@att.net's Avatar
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    Default Re: FEDS sue BANKS ??

    The government didn't provide a dollar amount of how much it seeks in damages.

    Ryou,

    I reread the article and this is all i could find on what the plaintiffs were asking -$900 million is NOT much compared to 196 billion- not even 1%-where did you find this figure ?
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

  4. #4
    Olympic Champ RYou's Avatar
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    Default Re: FEDS sue BANKS ??

    Quote Originally Posted by r.payton@att.net View Post
    The government didn't provide a dollar amount of how much it seeks in damages.

    Ryou,

    I reread the article and this is all i could find on what the plaintiffs were asking -$900 million is NOT much compared to 196 billion- not even 1%-where did you find this figure ?
    It's the value of loans that are in foreclosure. Much more in value is considered underwater, but the homeowners have not defaulted.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

  5. #5
    Olympic Champ r.payton@att.net's Avatar
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    Default Re: FEDS sue BANKS ??

    Ok-thanks !
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

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