Reports: US to sue big banks over risky mortgages

Federal Housing Finance Agency could file suit over misclassified mortgages within days

Topics: Mortgage Crisis,

Reports: US to sue big banks over risky mortgagesIn this Aug. 26, 2011 photo, a trader works on the floor of the New York Stock Exchange, in New York. World stock markets rose on Monday, Aug. 29, 2011, heartened by Federal Reserve chief Ben Bernanke's call on the U.S. government to help the economy and his refusal to rule out more monetary stimulus by the central bank. (AP Photo/Jin Lee)(Credit: AP)

Published reports say the U.S. government is planning to sue some of the country’s largest banks over mortgage-backed securities they sold that lost value in the housing market collapse, alleging they misclassified their quality.

The reports say the government would seek billions of dollars in losses in compensation. The reports cited people that were not identified.

The New York Times and The Wall Street Journal say the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac, could file a lawsuit within days.

The reports say securities that were backed by subprime and other risky loans but were deemed safe investments by ratings agencies are the ones at issue in this case.

The Times says the FHFA would not seek recovery of the total amount of the loans because some still have value.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 5
  • Close
  • Fullscreen
  • Thumbnails

    “One girl can be silenced, but a nation of girls telling their stories becomes free” slideshow

    A photo contest winner

    “One girl can be silenced, but a nation of girls telling their stories becomes free” slideshow

    A photo contest winner

    “One girl can be silenced, but a nation of girls telling their stories becomes free” slideshow

    Superhero Project

    “In life many people have two faces. You think you know someone, but they are not always what they seem. You can’t always trust people. My hero would be someone who is trustworthy, honest and always has their heart in the right place.” Ateya Grade 9 @ Mirman Hayati School (Herat, Afghanistan)

    “One girl can be silenced, but a nation of girls telling their stories becomes free” slideshow

    Superhero Project

    “I pray every night before I go to bed for a hero or an angel capable of helping defenseless children and bringing them happiness. I reach up into the sky hoping to touch a spirit who can make my wish come true.” Fatimah Grade 9 @ Majoba Hervey (Herat, Afghanistan)

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>