Massive Wave Of Lawsuits To Be Filed By The US Against America's Biggest Banks As Soon As Tomorrow



In a move that could either send BAC stock limit down overnight or send it soaring (we are still trying to figure out just what is going on here), the NYT has broken major news that the US is preparing to go nuclear on more than a dozen big banks among which Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, in an attempt for Fannie and Freddie to recoup $30 billion if not much more. The lawsuit is expected to hit the docket in the next few days: "The suits stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims." Now, taken at face value, this would mean that Bank of America can kiss its ass goodbye as unlike the Walnut Place litigation, this will take place in Federal Court where Article 77 is not applicable. Yet there is something that gives us pause: namely logic, captured by the following words: "While I believe that F.H.F.A. is acting responsibly in its role as conservator, I am afraid that we risk pushing these guys off of a cliff and we’re going to have to bail out the banks again,” said Tim Rood, who worked at Fannie Mae until 2006 and is now a partner at the Collingwood Group, which advises banks and servicers on housing-related issues." In other words: if the banks are sued, and if justice prevails, the end of the world is nigh and cue TARP 2 - XXX. Now where have we heard that argument over, and over, and over before.


more at link

http://www.zerohedge.com/news/massive-w ... n-tomorrow

U.S. agency to sue big banks over mortgages: report


A U.S. agency is planning to sue more than a dozen banks, alleging they misrepresented the quality of mortgage securities they packaged and sold to investors before the 2008 financial crisis, the New York Times reports.

The newspaper said the Federal Housing Finance Agency — which oversees mortgage finance companies Fannie Mae and Freddie Mac — could file the suit as early as Friday.
The suit, which comes after subpoenas issued to the banks last year, is expected to name more than a dozen large banks, the New York Times reports.(Lucy Nicholson/Reuters)
The yet-to be filed suit will target Bank of America, Goldman Sachs, JPMorgan Chase, Deutsche Bank and others, the newspaper reported, citing three unnamed sources.

The FHFA, which was created in July 2008, is expected to argue that the banks failed to do due diligence and missed evidence that borrowers' stated income was either inflated or falsified.

The newspaper said the regulator will seek billions of dollars in compensation


http://www.cbc.ca/news/business/story/2 ... tgage.html