This will take a while to unpack. And when the filings are made public, there will be other names--perhaps some from Wisconsin--on the list.
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 article mentions B of A, Goldman Sachs, JPMChase, and DeutscheBank.
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.
CNBC's tossing "$30Bn" as the number here. The Gummint's already gone after UBS for $900 million.
We're waiting for the same action against mortgage brokers, which were far less scrupulous than the banks. The B of A liability here has a lot to do with Countrywide, which B of A bought.
Perhaps the banks will turn around and sue various brokers.
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