U.S. Is Set to Sue a Dozen Big Banks Over Mortgages

[jefferson_dem]

Source: NYT

By NELSON D. SCHWARTZ

Published: September 1, 2011

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.


Read more: http://www.nytimes.com/2011/09/02/business/us-is-set-to-sue-dozen-big-banks-over-mortgages.html?pagewanted=all

[dixiegrrrrl]

1. Another civil suit which will result in minimal fines and agreements to protect banks

against further suits.
We need CRIMINAL charges against these banksters.

Which will never happen as long as the current paid for system is in place.

[westerebus]

3. Which will never happen...

as long as the current paid for team is in place.

There I fixed it for you. ;-)

[banned from Kos]

10. What "criminal" charges? Be specific and cite the statute.

I doubt you know anything about this.

[Name removed]

13. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Qutzupalotl]

20. Fraud, theft and possibly bribery for starters.

A friend of mine is in a legal battle with Deutsche Bank fighting foreclosure, despite owning her house free and clear. The bank apparently substituted a sympathetic judge at the last minute. Even with her deed, the judge allowed the case to proceed. That's such a travesty, I have to suspect bribery here.

Robosigning is fraudulent and just creates problems down the line.

[No Elephants]

25. I believe here the issue is misrepresentation as to how just how risky the mortgages that backed the

Mortgage backed securities were.

Fannie and Freddie bought about $30 billion worth of the securities and taxpayers took most of that hit.

[No Elephants]

24. Misrepresentation is just another way of saying fraud.

For every civil cause of action, there is usually a corresponding potential criminal charge.

[benld74]

2. OK fine, but will this EVER grow legs and walk on its own?

[No Elephants]

26. Probably very teeny legs.

[Bigmack]

4. I figure...

the Freddie and Fannie people are trying to shift the blame/liability to the banks that sold them the shitty paper.

80% of the loans were private, so why should F & F have to eat the blame.

We need to get the ratings agencies, the insurance companies, the title guarantors, the banks, the investment groups.. etc. all fighting among themselves. None of those entities wants to eat the huge losses coming up.

[RKP5637]

5. "and seeking billions of dollars in compensation." Damn, does that mean we

get the joy of bailing them out again as too big to fail.
:banghead:

[SlipperySlope]

21. What is the point anymore.

I say let them fail. That's what I've been saying since 2008.

The banks aren't the ones that are too big to fail. The *country* is what is too big to let fail, but by "saving" the banks we have risked all of our futures.

There isn't enough money to cover all the bad mortgages and the mountain of derivatives written on top of them. The derivatives market dwarfs the real economy.

But you're right - let's just fine them and then give the money back to them as under-the-table bailouts, so they can pay out another few billion in bonuses.

[RKP5637]

22. Yep, we can play musical chairs with them and just keep rotating the

cash around saying things are getting better. I said the same in 2008, let them fail, and still the same today. There is no way in hell we are going to get out of this by rewarding banks over and over again. IMO they should have been broken up back in 2008. Meanwhile, the way we're headed, we're going to lose the whole country. The whole thing is a crock IMO.

The majority of the citizens are being treated as extremely low level employees in a crooked investment house.

[Bozita]

6. a polite suggestion for the dirty dozen ...

No safety nets, now. Just like the public.

And, have a nice day!

[Historic NY]

7. I think that was what the NY AG dustup was about competing suits.

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

[glinda]

8. and no help for the people

[RyanPsych]

9. Unless someone goes to jail

and I mean a CEO- then its all just another fucking scam

[Modern_Matthew]

11. I'd be willing to settle for everyone affected keeping their house with no further payments. nt

[WillyT]

12. K & R !!!

:kick:

[Po_d Mainiac]

14. hmm.... kill one bank (BAC)

start a contagion...stir pot vigoriously....instil martial law

[toddwv]

15. Hopefully this will shed some much needed light on the true root of our economic issues.

Well, one of them at least...

[dipsydoodle]

16. S&P Just Rated A Bundle Of Subprime Mortgages Higher Than The U.S.

Posted yesterday in LBN : http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=4981068

S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties. http://www.businessinsider.com/sp-just-rated-a-bundle-of-subprime-mortgages-higher-than-the-us-2011-8

[dipsydoodle]

17. BBC link to subject

http://www.bbc.co.uk/news/world-us-canada-14758677

[mistertrickster]

18. Great. Our gov't can give them the money so they can pay their fines. nt

[Scurrilous]

19. K & R

:thumbsup:

[TomCADem]

23. It is really Fannie Mae and Freddie Mae Suing Mortgage Originators

...for misrepresenting the mortgages that make up the mortgage backed securities. This also stems from mortgage issuers like Countrywide giving loans to anyone who could fog a mirror with stated income loans.

[No Elephants]

27. We're suing them for a lot less than we gave them in the bailout and we'll settle out of court

for a fraction of what we're suing them for.

The other issue is Fannie and Freddie.

Taxpayers ought to sue them, too. In fact, we should sue our entire blanking government, but we don't have standing.