I thought this was interesting:
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 will argue that banks failed to perform due diligence and missed evidence that borrowersâ incomes were inflated or falsified.
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.
Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers. In July, the agency filed suit against UBS, another major mortgage securitizer, seeking to recover at least $900 million, and the individuals with knowledge of the case said the new litigation would be similar in scope.
Private holders of mortgage securities are already trying to force the big banks to buy back tens of billions in soured mortgage-backed bonds, but this federal effort is a new chapter in a huge legal fight that has alarmed investors in bank shares. In this case, rather than demanding that the banks buy back the original loans, the finance agency is seeking reimbursement for losses on the securities held by Fannie and Freddie.
Thoughtful Black Co-Citizen
Place your bets on the first DirtBagger to revive the FEMACORN Panthers forced the banks to give loans to deadbeat Young Bucks squawking point.
My money is on Hindrocket.
kay
@Thoughtful Black Co-Citizen:
Right. But is it meaningful or important, substantively? I don’t know jack about high finance, but my sister does, and she sent it to me with no comment.
She’s holding her cards close to her chest on this :)
Gin & Tonic
Not really on topic, but a subject which you’ve written quite a bit about — Achievement First’s application to set up and run some charter schools in Providence and Cranston (RI) was rejected by the state’s Board of Regents. It wasn’t even close: the board voted 7-1 (with one member absent) to deny the application.
kay
@Gin & Tonic:
Oh, thanks so much. I’ll read it if you’ll give me the link.
Culture of Truth
But Obama went All Out for the Dirty Banker deal! Taibbi called him Barry and everything!
Gin & Tonic
@kay: Sorry, should have included that. This is a setup piece giving more detail from before the vote. I can’t find an equally long piece from after the vote, but this is from the local paper’s daily news blog reporting on the outcome. It was on the front page of today’s print edition of the Providence paper.
Culture of Truth
Bank of America has been told by the Federal Reserve to explain what steps it would take if its financial condition worsens.
catclub
@Culture of Truth: Yanking the chains of its various branch officers in congress and treasury?
Same as always Pinky, trying to take over the world.
singfoom
Ah, the very slow wheels of justice. I hope that they continue to grind on and that this goes forward well.
The 50 state AG deal with the banks is most likely dead in the water at this point as well.
I’m glad to see some action against the systematic criminal enterprise that is our financial sector.
LGRooney
Okay, so, Fannie & Freddie guarantee mortgage loans because these big-bad-macho, free-enterprise-uber-alles, we-are-gods-don’t-fuck-with-us finance MBAs (my last degree, by the way) aren’t tough enough to handle the risk inherent in not being racially, gender or class prejudiced. They decide, fuck the taxpayer, if they’re going to take the risk, I’ll make all the money on it I can with no downside.
I know, I know, we’ve heard that before.
Before all this came to light, companies started abusing Chapter 11 to dump their obligations to retirees into the PBGC (not directly funded by taxpayers but running a deficit on what little it does take in meaning the taxpayers have to cover the difference with PBGC in hock to the taxpayers).
Any others out there we can add to this list and make it more substantive as a roster of how chickenshit Wall Street and the Boardrooms of major
individual citizenscorporations are?TheWorstPersonInTheWorld
Gosh, I wonder why this alleged crackdown took three fucking years to get around to?
And gosh, I wonder why press releases about this alleged crackdown are going out just as we enter labor day weekend and the beginning of the insanely long 2012 campaign. Hmmm…
Does wondering these wonderings make me a racist? Why, I’m sure it does…
Bruce S
Also, the robosigning continues – proving that the Banks, because they hold a gun to the head of the “real economy” – can get away with stuff that would put a small-time grifter behind bars:
http://www.americanbanker.com/issues/176_170/robo-signing-foreclosure-mortgage-assignments-1041741-1.html
Anya
It’s a good move but with Robert’s Court on their side, are the banks scared of this move. I think this will alarm investors and their shares will take few hits but do they have anything to worry about considering our corporatist court?
kay
@TheWorstPersonInTheWorld:
It’s in the piece at the top of the page:
They’re asking for a specific sum. They’d have to prove that. They reached that sum through subpeonas.
They can’t just file suit and appear and say “A LOT. They owe us a LOT”.
The amount here appears to be “more than 30 billion” but “some stated number” would be important to a judge.
John Puma
If the government fails to seek and obtain criminal penalties in these cases, but only fines, the government only co-conspires in the fraud and does NOTHING to create a “deterrent” for future acts. I make no distinction between lack of prosecution of adequate law or the absence of adequate law as the cause for lack of criminal penalties.
This, especially, with the hastily delivered, dollar pipelines directly into the vaults of the banks whenever they burn themselves squeal for mommy’s help.
Jamey: Bike Commuter of the Gods
http://www.youtube.com/watch?v=RTOQUnvI3CA
Emma
@TheWorstPersonInTheWorld: No, but it makes you an utter and complete arse.
aisce
while any legal action against the fraud that was perpetrated is welcome, kay, it’s better to think of fannie/freddie as financial institutions instead of parts of government.
in which case, this is more like a private action from one co-conspirator countersuing another to make up bad losses on their mutual fraud. as though fannie/freddie didn’t know the fucking loans were junk. but aig sues citi who sues bank of america who sues blackrock who sues deutsche who sues goldman who sues morgan stanley. and then the fhfa sues everybody.
counterparties covering their own asses, not so much the government. the conservators of fannie and freddie are deep in the red, their books are atrocious, and they’re trying to make some of that back up with the loan originators.
Villago Delenda Est
This behavior will not change until banksters start going to jail for long sentences.
TheWorstPersonInTheWorld
@Emma:
Oh, Emmie, such a sad and bitterly disappointed Obot you are…I will pray for you.
kay
@aisce:
Thanks. I could see that.
I read ProPublica on the bank bailouts, and it’s been helpful, because it’s plain language w/out a lot of hysterics. Grim, but not hyperbole. Not that there’s anything wrong with hyperbole per se, but I find it distracting if I’m trying to understand something.
Unabogie
@TheWorstPersonInTheWorld:
No, your pre-emptive whinging against being called a racist is what makes you a racist. Why did you jump to that conclusion when no one accused you of being anything but a fucking moron? Who brought up race, except you?
You sound like a Teabagger, not a Firebagger. Teabaggers are always complaining about being called racists. And they care, because like you, they are, they know it, and so do we.
Have a nice day, troll.
Mino
We’ll see. But the head of Fanny/Freddy is a Bushie carryover. Supposedly, Obama has been looking for a way to fire him.
TheWorstPersonInTheWorld
@Unabogie:
No, your pre-emptive whinging against being called a racist is what makes you a racist. Why did you jump to that conclusion when no one accused you of being anything but a fucking moron? Who brought up race, except you? You sound like a Teabagger, not a Firebagger. Teabaggers are always complaining about being called racists. And they care, because like you, they are, they know it, and so do we. Have a nice day, troll.
Ummm…do you ever read upthread, retard? Charges of racism are being thrown right and left, on this thread and many others. I was preemptively acknowledging my own, deeply seated racism so that you wouldn’t have to.
Also too: You are a parody of an Obot troll. All you HAVE, since your president is a spineless flop, are charges of RACISM!, so that’s what you go for. Well…it’s a strategy, I guess.
Cat
While I’m happy to see BoA suffering, its going to be short lived. The US Taxpayers are going to end up paying for pleasure of watching BoA’s suffering since BoA is going to be nationalized or bailed out.
The people who actually made the decisions and benefited from the ticking time bombs they left won’t suffer.
Josie
I’m sure this is a dumb question, but finance is not an area I know anything about. What happens to the people who owe on mortgages or lines of credit when a bank is bailed out or nationalized?
catclub
@Villago Delenda Est:”This behavior will not change until banksters start going to jail for long sentences.”
That was why Joyce and Faulkner did hard time. Proust got the death penalty.
Cat
@Josie:
They continue paying like nothing happened.
KJ
Seems to me Fannie/Freddie also need to sue the rating agencies since they were main culprits in signing off on the credit quality of the mortgage backed securities at issue.
El Cid
@Bruce S:
AlphaLiberal
It’s a start. Next Obama should clean out and reform the SEC.
AlphaLiberal
“Behind every great fortune lies a crime.”
– voltaire.
more or less
boss bitch
Ask for it, get it, brush it aside. This is the pattern for every issue that the left says they care about.
And this behavior (Wall Street) is never ever going to stop. I think its best to lesson the blows and enforce regulations to reduce these crimes.
singfoom
@boss bitch:
I’m confused. Can you explain what you mean? You think it’s wrong for people to focus on this issue, which touches on many other parts of our economy/political system? Or you think they stop paying attention after a while?
And you don’t think something should be done to stop this behavior?
Please, explain….
A Humble Lurker
@TheWorstPersonInTheWorld:
Quotes? Links to said comments?