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US 'to sue a dozen banks over housing bubble mortgages'
Originally posted by 5corpio
The US is planning to sue more than a dozen major banks for misrepresenting the quality of mortgages they sold during the housing bubble, the New York Times reports. The Federal Housing Finance Agency will argue that the banks should have known the securities were not sound. Bank of America, JPMorgan Chase, and Goldman Sachs are to face action, the newspaper quotes sources as saying.The suits could be filed as early as Friday, it adds.
The Federal Housing Finance Agency - which oversees mortgage giants Fannie Mae and Freddie Mac - blames the banks for failing to perform adequate checks on the quality of mortgage securities they sold on to investors before the financial crisis in 2008.
Fannie Mae and Freddie Mac lost more than $30bn (£18.5bn), partly because of the deals, and had to be bailed out by the government.
The suits follow subpoenas the finance agency issued to banks last year, according to the newspaper. The BBC's Marcus George in Washington says this is the latest of a number of lawsuits against financial institutions who were involved in the practice of issuing mortgage-backed securities.
However, some executives say the losses were made because of the....Read more on todays story-----> BBC News - US
The Federal Housing Finance Agency - which oversees mortgage giants Fannie Mae and Freddie Mac - blames the banks for failing to perform adequate checks on the quality of mortgage securities they sold on to investors before the financial crisis in 2008.
Fannie Mae and Freddie Mac lost more than $30bn (£18.5bn), partly because of the deals, and had to be bailed out by the government.
The suits follow subpoenas the finance agency issued to banks last year, according to the newspaper. The BBC's Marcus George in Washington says this is the latest of a number of lawsuits against financial institutions who were involved in the practice of issuing mortgage-backed securities.
However, some executives say the losses were made because of the....Read more on todays story-----> BBC News - US
US authorities are to sue 17 major banks for losses on mortgage-backed investments that cost taxpayers tens of billions of dollars.
The Federal Housing Finance Agency said it was taking action against banks including Goldman Sachs, Barclays, Bank of America, Deutsche Bank, and HSBC. The agency says they misrepresented the quality of the mortgages they sold during the housing bubble.
The values plunged as the US was engulfed in the financial crisis.
The FHFA oversees mortgage giants Fannie Mae and Freddie Mac.
The two firms lost more than $30bn (£18.5bn), partly because of their investments in the subprime mortgages, and were bailed out by the US government. Since the rescues, US taxpayers have spent more than $140bn to keep the firms afloat. Other banks facing action include Royal Bank of Scotland, Nomura, Citigroup, and Societe Generale. A spokesman for RBS said: "We believe we have substantial and credible legal and factual defences to these claims and will defend them vigorously." Speculation in recent days that the FHFA was about to launch legal action had led to falls in US bank share prices. The FHFA said in a statement that there had been "improper actions by the firms and individuals".
"Based on our review, FHFA alleges that the loans had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the Enterprises for those securities," the statement said.
Major banks are already negotiating with the attorneys general of all 50 states to settle...Read more on this story----> BBC News - US regulator to sue banks over subprime mortgage losses
The Royal Bank of Scotland says it will vigorously defend itself against US government claims it misrepresented the quality of mortgages it sold. The US Federal Housing Finance Agency (FHFA) has filed lawsuits against 17 banks, including RBS, Barclays and HSBC, over mortgage-based investments. Values plunged during the financial crisis and a bailout of mortgage firms cost US taxpayers billions of dollars. RBS says it has "substantial" legal and factual defences to the US claims. A spokesman said: "We believe we have substantial and credible legal and factual defences to these claims and will defend them vigorously."
Goldman Sachs, Bank of America, Deutsche Bank, Nomura, Citigroup, and Societe Generale are among the other banks facing legal action from the.......Read more on this story ---> CLICK HERE