Feds to Sue Big Banks Over Mortgages

[krome2ez]

US to Sue Big Banks Over Mortgages

September 2, 2011

The federal agency that oversees the mortgage giants Fannie Maeand 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, 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.

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.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

http://patriotupdate.com/11675/us-to-sue-big-banks-over-mortgages

If I remember right, didn't Acorn and the feds force the banks to make these loans?

And if Freddie and Fannie lost so much money, why did their execs get such big bonuses?

Video: Fannie & Freddie execs made millions in bonuses the last two years

April 4, 2011 by Ed Morrissey

If any organization should see a big restriction in executive compensation, it should be the government-seized, taxpayer-rescued Fannie Mae and Freddie Mac. Congress has expanded the bailout of the two GSEs at the heart of the global economic collapse a number of times, with the potential cost to the Treasury estimated as high as $363 billion dollars. Recall, too, that the Obama administration created a “pay czar” to regulate executive compensation at private-sector banks that took TARP money to discourage excessive compensation. As the Wall Street Journal reported last week, the White House seems to care less about that issue in the public sector:

A federal watchdog criticized federal regulators’ oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday.

The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants.

The firms were taken over by the government in 2008 and have cost taxpayers $134 billion. Both firms have seen heavy turnover at the senior ranks.

Freddie Mac Chief Executive Charles E. Haldeman Jr. joined Freddie Mac in 2009, becoming the fourth person to head the company in a 12-month span. Michael Williams, a Fannie Mae veteran, took the top job at the company in 2009.

The report criticized the government for failing to independently verify whether the companies had adequately met certain performance-related compensation targets.

Republicans want the federal pay system imposed at Fannie and Freddie to cut compensation to its executives. The Obama administration’s acting director of FHFA, the agency overseeing Fannie and Freddie, complained that this would make it more difficult to compete for talent:

Edward DeMarco, the acting director of the FHFA, warned Thursday that the “disruptiveness” of such a change could make it harder for the government to recover the value of its investments in the companies.

“The government has enormous exposure here on $5 trillion in mortgage securities,” he said. “I’d like to make sure we have qualified people managing that … on behalf of the taxpayer.”

Well, isn’t that true of the firms that fell under the control of the Pay Czar, as well? At least in those cases, the continuing compensation resulted from private-sector revenues and not infusions of government cash. The hypocrisy is rather stunning, and Rep. Thad McCotter pointed out on Fox News yesterday that the nation can’t afford to offer bonuses to GSEs that continue to suck cash out of taxpayer pockets:

Actually, pay czar Kenneth Feinberg approved these compensation packages, claiming that they met the “unique problems” of Fannie and Freddie at the time. Losing money based on bad business decisions isn’t a “unique problem,” especially not for the federal government. If the talent argument works for Fannie and Freddie, then it also works for the private sector — and Obama should never have inserted himself into the private-sector compensation process in the first place. Now it looks as though the administration doesn’t want Congress to control compensation in the public sector.

http://hotair.com/archives/2011/04/04/video-fannie-freddie-execs-made-millions-in-bonuses-the-last-two-years/

[tired_of_waiting]

Simple : because the name of the game is screw the working class !!!

Edited September 2, 2011 by tired_of_waiting

[ashtray]

if the agency sues and wins .. i guess the money will belong to them ...

i doubt they will concider those who lost their homes .. down payments .. and the tax payers .. im sure they will just sue and pocket the money... like when someone punchs someone and they get a fine .. the govt keeps the fine money .. they dont give it to the person who got punched ....or to the victom of any crime .. .. if the bankers broke the law they should go to jail .... if no laws were broken .. how can you sue them ?.. sue them for doing legal things ?

[uncirculd]

US to Sue Big Banks Over Mortgages

September 2, 2011

The federal agency that oversees the mortgage giants Fannie Maeand 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, 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.

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.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

http://patriotupdate.com/11675/us-to-sue-big-banks-over-mortgages

If I remember right, didn't Acorn and the feds force the banks to make these loans?

And if Freddie and Fannie lost so much money, why did their execs get such big bonuses?

Video: Fannie & Freddie execs made millions in bonuses the last two years

April 4, 2011 by Ed Morrissey

If any organization should see a big restriction in executive compensation, it should be the government-seized, taxpayer-rescued Fannie Mae and Freddie Mac. Congress has expanded the bailout of the two GSEs at the heart of the global economic collapse a number of times, with the potential cost to the Treasury estimated as high as $363 billion dollars. Recall, too, that the Obama administration created a “pay czar” to regulate executive compensation at private-sector banks that took TARP money to discourage excessive compensation. As the Wall Street Journal reported last week, the White House seems to care less about that issue in the public sector:

A federal watchdog criticized federal regulators’ oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday.

The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants.

The firms were taken over by the government in 2008 and have cost taxpayers $134 billion. Both firms have seen heavy turnover at the senior ranks.

Freddie Mac Chief Executive Charles E. Haldeman Jr. joined Freddie Mac in 2009, becoming the fourth person to head the company in a 12-month span. Michael Williams, a Fannie Mae veteran, took the top job at the company in 2009.

The report criticized the government for failing to independently verify whether the companies had adequately met certain performance-related compensation targets.

Republicans want the federal pay system imposed at Fannie and Freddie to cut compensation to its executives. The Obama administration’s acting director of FHFA, the agency overseeing Fannie and Freddie, complained that this would make it more difficult to compete for talent:

Edward DeMarco, the acting director of the FHFA, warned Thursday that the “disruptiveness” of such a change could make it harder for the government to recover the value of its investments in the companies.

“The government has enormous exposure here on $5 trillion in mortgage securities,” he said. “I’d like to make sure we have qualified people managing that … on behalf of the taxpayer.”

Well, isn’t that true of the firms that fell under the control of the Pay Czar, as well? At least in those cases, the continuing compensation resulted from private-sector revenues and not infusions of government cash. The hypocrisy is rather stunning, and Rep. Thad McCotter pointed out on Fox News yesterday that the nation can’t afford to offer bonuses to GSEs that continue to suck cash out of taxpayer pockets:

Actually, pay czar Kenneth Feinberg approved these compensation packages, claiming that they met the “unique problems” of Fannie and Freddie at the time. Losing money based on bad business decisions isn’t a “unique problem,” especially not for the federal government. If the talent argument works for Fannie and Freddie, then it also works for the private sector — and Obama should never have inserted himself into the private-sector compensation process in the first place. Now it looks as though the administration doesn’t want Congress to control compensation in the public sector.

http://hotair.com/archives/2011/04/04/video-fannie-freddie-execs-made-millions-in-bonuses-the-last-two-years/

Will you take a look at this crap. No, eastern states have filed lawsuits and this is election garbon. It's crap. They bailed them out knowing what they did and no indictments were handed down, and they are still doing it. I am sorry I don't have a link right now, but this started in Florida. These lawyers are after all the mortgages that were bundled and sold (subprime) for investors (rated by S&P AAA) and did not have all the proper documentation. My advice to any one with a subprime coming up for adjustment, (as they do yearly) tell your mortgage company to produce the note and title.

[Butifldrm]

Who needs to be sued, is Barney Frank and Chris Dodds. I saw Chris Dodds on the news answering a reporters question as as to why all the new laws passed on banking reform did not affect Fannie Mae or Freddie Mac? His answer was, "well that would't be fair, then people who couldn't afford houses could not purchase one" . I almost Sh*t a brick. We are going down the tubes fast people, unless we get a control on our government. JMO