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Two Big Lawsuits Take Aim At Big Banks

Two Big Lawsuits Take Aim At Big Banks

 

The federal government announced plans to file suit against more than a dozen big banks, accusing them of fraud and misrepresentation in connection with the collapse of the housing market.

The Federal Housing Finance Agency, the agency that oversees Fannie Mae and Freddie Mac, has claims aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, for misrepresenting the quality of mortgage securities they assembled and sold during the housing bubble. The suit reportedly seeks billions of dollars in damages.

According to The New York Times, the suit alleges the banks failed to perform the due diligence required under securities laws when assembling mortgages and marketing them as securities to investors.

The suit is the latest bad news for the banks who may not have a settlement with state attorneys general after all. Last week the attorney general of Nevada filed suit accusing Bank of America of repeatedly violating broad mortgage loan modification agreements and is seeking to rip up the deal so that the state can sue the bank over additional allegations of deceptive lending, marketing and loan servicing practices.

While these two suits are good news for those who have complained that the big banks have had to suffer few, if any, consequences for their role in crashing the economy, they offer little immediate relief for struggling homeowners. Hopefully the momentum can continue on in this direction. And if the economy continues to stall and unemployment remains around 10% the pressure to claw-back those banking profits will only increase.

Now if only the political leadership existed to once and for all stand up to the banks and demand immediate relief like loan modifications and debt forgiveness. Then we’d be talking about real progress.

 

Related Stories:

Department of Justice Targets Wells Fargo For Discrimination

Countrywide Pays 108 Million To Settle Mortgage Fraud Claims

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Photo from steakpinball via flickr.

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28 comments

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12:02PM PDT on Sep 6, 2011

Looks good on paper but I dont see anything happening. as well as the bankers there should be some regulators and politicans going to Jail also. this is dirty enough that a lot of people need to be behind bars.

9:30AM PDT on Sep 5, 2011

Absolutely agree with Steve R and could not say it better. They are crooks-no doubt about it. However, they are crooks with power so it will take longer to take them down. But, I think, they will be taken down and exposed for what they are. Remember Richard "I Am Not A Crook" Nixon. Thought he could get away with anything. Turns out he was found out in the end and also found out to the the Paranoid, Lying, Anti-Semetic crook he was. He did manage to avoid any real punishment (other than resigning in disgrace) thanks to the deal he made with Gerald "can't walk and chew gum at the same time" Ford. In the end the truth will be known. Whether the crooks will be punished remains to be seen. I guess the deciding factor is whether they still have enough money and power to buy the right politician.

5:57PM PDT on Sep 4, 2011

Robert H, laugh all you want; then try reading. You might be interested to see that he did start the changes; not that he is the person to blame solely, just that he changed the dynamics and started this on a different path. All presidents since have added their own elements, Democrat and Republican. Try reading the timeline, very informative and interesting; nothing more was intended and if you chose to prefer to ROTFLFAO, go for it. It causes me no distress that you chose to attempt an insult; I learned some interesting facts today and that is all that is of importance to me; your chose to laugh rather than learn something new is your choice. No problem for me, either.

5:52PM PDT on Sep 4, 2011

Dale A, it appears that you are completely unable to read. What I said was that the beginning of our problems started with Jimmy Carter, yes, but that does not mean I was giving him the blame any more than any other. It simply started there and snowballed into the mess that we have now; each successive president and his administration and Congress adding more to the problem. If you note, I also commented that it was the fall of Lehman Bros. that really set things in motion for the current crisis; they owned so many of the mortgages, having bought them from lending institutions and that it was unfortunate that they will not be held accountable for this mess, as well. As for drugs; Rosemary G, LOL. Since I take none and simply thought there might be people here that would find this reading informative as I suggested, nothing more Apparently you are more on the attack mode than desiring some factual reading.

12:20PM PDT on Sep 4, 2011

I hope these lawsuits also include those greedy people at the top who have profited (by means of excessive bonuses) from the misery of others.

8:22AM PDT on Sep 4, 2011

lets hope politicians stand to this criminals and expose all this bastards for what they are....is time to pay for the consequences of destroying millions of american dreams.

9:03PM PDT on Sep 3, 2011

Carter????/ Cater????? ROTFLFAO HAHAHAAHAHAHAAHAHAAHAHA

9:02PM PDT on Sep 3, 2011

I see so we should let the banks get way with anything they wish because it may lay some people off. I feel bad about the employees like I any unemployed people.

But they comopany that hire tem has stolen money from people potentially. It needs to be looked into.

6:41PM PDT on Sep 3, 2011

Thank you Linda T. Reducing the value of mortgages is the LEAST they can do to make up for forclosures.

12:18PM PDT on Sep 3, 2011

Linda C, what drugs are you on? I have lived here in the states since 1971 and have seen this once incredible country go down the toilet thanks to a F rated delusional movie star...I could not believe it...but unfortunately it is true..

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