In addition to Bank of America/Merrill Lynch, the FHFA also filed complaints against JPMorgan, Citigroup, Goldman Sachs, Barclays, Nomura Holdings, HSBC Holdings, Societe Generale SA, Credit Suisse, Deutsche Bank and First Horizon National Corp in federal court in Manhattan.They also sued Ally Financial, Countrywide Financial Corp, General Electric Co. and Morgan Stanley in state court in Manhattan, and sued Royal Bank of Scotland Group Plc in federal court in Connecticut
Bank of America alone is on the hook for $57Bn.
Don't be surprised to see some Wisconsin lenders in the next wave.
7 comments:
The irony here is that the government set the system up to fail in this manner. It's not unlike you removing rungs from your ladder and wondering why you fell down it.
Yah, but...
There's a big difference between 'pushing the edge' and outright fraud or lack of due diligence.
And remember this: many of the banks named bought the loans from brokers (who are REALLY scumbags) and then turned them around to Fan/Fred.
No doubt BawneyFwank and his ilk did their damndest to muck up the system, but there are plenty of banks who played by Bawney's Rules and STILL didn't make loans on the fog-a-glass template.
I'm not sure they really want to go down this bunny-hole....
If my memory serves correctly, it was the Feds that encouraged BofA to acquire Countrywide after the meltdown, Countrywide is where the vast majority of their suspect loans came from and now those same Feds are going after BofA? I'm sure the 10-30K BofA employees that will lose their jobs will appreciate these moves as well.
BofA ain't in that ship alone either.
To me, this reeks of political gamesmanship ala Spitzer bringing down Strong Funds.
If I were one of those executives, I'd pull a WikiLeaks and put out all the dirt on Holder, Geithner, Bernanke, et al as a proactive move.
Oh, I'm sure there's a long-term strategy here which will NOT redound to the benefit of the future taxpayers.
Yes, the Fed (IIRC) 'helped' BofA acquire Countrywide (and Merrill, Lynch, too) which put a lot of the crap on their books.
But that doesn't excuse BofA for its lack of due diligence.
It may turn out that BofA becomes nationalized, but not for a clean-up-and-flip operation. Obozo would love to have his own personal bank.
And as Ritholtz astutely asked: where's Wells Fargo?
Good question, indeed!
Wells Fargo who was "helped" in taking over Wachovia...
There are very few innocent players in this, but this is nothing but political kabuki by going after selected institutions while leaving Fannie/Freddie, Franklin "I cooked the books and made a boatload" Raines, Jamie Gorelick, Chris "Friend of Angelo" Dodd, every poverty pimp and race-baiting organization that threatened to boycott or sue these same banks for not making loans more lenient, and all of their other political handlers (Frank, Waters, Obama, Clinton, et al) off the hook...
And now, instead of having money available for loans and fixing up their own books, all of these banks get to fight the same Feds who encouraged the bad behavior in the first place.
Did I ever mention that there's Too Damn Much GUMMINT in this country?
Once you go on a date with an incipient VD transmitter, you're dancing with the wrong partner, no?
Why yes, I believe you have mention that a time or two.
:-)
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