Saturday, September 3, 2011

Great Recession:  U.S. To Sue Big Banks over Mortgages

The agency that oversees U.S. mortgage markets is preparing to file suit against more than a dozen big banks, accusing them of misrepresenting the quality of mortgages they packaged and sold during the housing bubble, the New York Times reported late Thursday.
The government will argue the banks, which pooled the mortgages and sold them as securities to investors, failed to perform due diligence required under securities law and missed evidence that borrowers' incomes were falsified or inflated, the Times reported. Fannie and Freddie lost more than $30 billion, due partly to their purchases of mortgage-backed securities, when the housing bubble burst in 2008.

For more, see U.S. To Sue Big Banks over Mortgages by Reuters, September 1, 2011 at The Washington Post.

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