Feds to sue JP Morgan Chase, Goldman Sachs and other major banks

Feds to sue JP Morgan Chase, Goldman Sachs and other major banks over mortgage mess:


A federal agency is set to file a blockbuster lawsuit against several major banks - accusing them of defrauding Fannie Mae and Freddie Mac, The New York Times is reporting.

The suit, which will be filed by the Federal Housing Finance Agency, will seek billions of dollars in compensation from the banks at a time when they are, in some cases, barely making ends meet, The Times said

Read more: http://www.nydailynews.com/news/nat...s_over_mortgage_mess_paper.html#ixzz1Wo4hQMJk

Good start!!!

This would be a wonderful start.
However if you want some chilling and frustrating reading on just how little the federal government(The Fed,The Obama administration and BOTH aisle s of Congress) has done to censure those responsible in the financial industry for our economic crisis or to reign in the excesses that brought it about(and in many cases cover up for and protect some of these criminals in $3000 suits) check out some of the writing Matt Tabbie has done for Rolling Stone on the financial meltdown and the banking industry's role in it.
If your easily upset you may want to have someone lock you in the trunk of your car before you read it.

Finally!!! But in the long run, who is gonna be the ones to pay? We will! It's a vicious cycle.. sigh.

As someone who currently has a mortgage held by BOA, I just wonder what will happen to their customers if the companies are held liable. My mortgage has no "on demand" clause and a "no sale" clause. We didn't originally choose BOA, we chose Countrywide which was then bought out. We chose Countrywide even though we knew they were limping along because they were willing to take a chance on us in 1999. They gave us one of those sub-prime mortgages due to our low income. We lived in the house six years, made improvements, sold before the market started to tank and made money. When it came time to buy again and we had 20% down and a stellar credit rating, we went back to them because they were willing to take the risk on us years ago.
I understand that they need to be held accountable for their actions, but what about the "little guys"?

kline said:

This would be a wonderful start.
However if you want some chilling and frustrating reading on just how little the federal government(The Fed,The Obama administration and BOTH aisle s of Congress) has done to censure those responsible in the financial industry for our economic crisis or to reign in the excesses that brought it about(and in many cases cover up for and protect some of these criminals in $3000 suits) check out some of the writing Matt Tabbie has done for Rolling Stone on the financial meltdown and the banking industry's role in it.
If your easily upset you may want to have someone lock you in the trunk of your car before you read it.

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Excellent post Kline! Here is the link to Tabbai's blogs.

http://www.rollingstone.com/politics/blogs/taibblog

Tabbai's blog on Jefferson County's sewer project with JP Morgan is especially frustrating. A couple of crooked politicians financed the project with JP Morgan and ended up refinancing several times until the project costs skyrocketed from like 50 million to many, many times over. The politicians went to jail for the bribes and fraud....the crooked JP Morgan execs, who concocted the scheme, did not. WTF? The banksters were slapped on the wrist and had to take some money off the cost of the loan and yet the taxpayers of Jefferson county are on the hook for the rest of the overpriced project.

What was to be an infrastructure upgrade for the citizens turned into a way for the banksters to line their pockets and have the people pay for their crimes....and no bankster went to jail.

Pandora said:

As someone who currently has a mortgage held by BOA, I just wonder what will happen to their customers if the companies are held liable. My mortgage has no "on demand" clause and a "no sale" clause. We didn't originally choose BOA, we chose Countrywide which was then bought out. We chose Countrywide even though we knew they were limping along because they were willing to take a chance on us in 1999. They gave us one of those sub-prime mortgages due to our low income. We lived in the house six years, made improvements, sold before the market started to tank and made money. When it came time to buy again and we had 20% down and a stellar credit rating, we went back to them because they were willing to take the risk on us years ago.
I understand that they need to be held accountable for their actions, but what about the "little guys"?

Click to expand...

You are not accountable for whatever happens to BOA....even if BOA goes out of business and some other company picks up your loan. Your contract has to be honored. You'll simply send your money to whoever has your loan.

Feds sue big banks over large losses

WASHINGTON – Federal regulators launched a broad legal assault on big banks Friday, claiming they sold nearly $200 billion in fraudulent mortgage investments to housing giants Fannie Mae and Freddie Mac that led to massive losses during the financial crisis.

The suits, brought by the Federal Housing Finance Agency, name 17 domestic and foreign banks as defendants. Among them: Bank of America, J.P. Morgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Deutsche Bank.

According to the court filings, those firms and others “falsely represented” the quality of the loans that were bundled into securities and sold to investors and “significantly overstated the ability of the borrower to repay their mortgage loans.” The result, the suits claim, were investments that were far riskier than the banks led taxpayer-backed Fannie and Freddie to believe, and the securities ultimately were worth a fraction of their original value

http://www.nwherald.com/2011/09/03/feds-sue-big-banks-over-large-losses/ah95213/

mysticrose said:

Feds sue big banks over large losses

WASHINGTON – Federal regulators launched a broad legal assault on big banks Friday, claiming they sold nearly $200 billion in fraudulent mortgage investments to housing giants Fannie Mae and Freddie Mac that led to massive losses during the financial crisis.

The suits, brought by the Federal Housing Finance Agency, name 17 domestic and foreign banks as defendants. Among them: Bank of America, J.P. Morgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Deutsche Bank.

According to the court filings, those firms and others “falsely represented” the quality of the loans that were bundled into securities and sold to investors and “significantly overstated the ability of the borrower to repay their mortgage loans.” The result, the suits claim, were investments that were far riskier than the banks led taxpayer-backed Fannie and Freddie to believe, and the securities ultimately were worth a fraction of their original value

http://www.nwherald.com/2011/09/03/feds-sue-big-banks-over-large-losses/ah95213/

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Think of all the bonus money banksters got for the fraudulent loan products!:maddening:

And we taxpayers get the tab.

Dare we hope for justice? Or will the thieving 'Masters of the Universe' get a wrist slap and a tiny fine for not admitting guilt or innocence?



http://www.huffingtonpost.com/2011/09/07/new-york-prosecutors-wide_n_951795.html


New York prosecutors are widening their investigation into the manner in which Goldman Sachs (GS.N) marketed certain mortgage-linked securities before the financial crisis, the Wall Street Journal reported, citing people familiar with the matter.

The Manhattan district attorney's office began its probe into Goldman following the release in April of a U.S. Senate subcommittee report into the causes of the financial crisis, the paper said.

Pandora said:

As someone who currently has a mortgage held by BOA...

Click to expand...

When we bought in 1999 (conventional 30 year fixed rate at 5.2%, no PMI) we were with Countrywide too....now we've got BOA. We're current with the mortgage, but under water due to property values taking a major dive....so, I looked into the Obama "Reduction in Principal" program initiated through HUD. Well, wouldn't you know it...BOA is not participating in it, and there is NOTHING that can be done about it. When I talked to BOA I was told "participation is voluntary". So, basically, the current administration bailed out BOA (among so many others), they're getting richer and fatter, and the people who work, pay their mortgage on time, are CREDIT WORTHY, and do it all on the up and up - get the shaft.

Personally, I believe they should have been allowed to fail the first time around. Makes me sick....:sick::sick:

Fanny Mae and Freddie Mac are just as guilty as the banks. I have documented proof dating back to 1998 that they had knowledge that bad loans were being submitted to them. There is proof that a company I was working with made several calls to Fannie Mae numerous times warning them of possible fraud that was being committed, there is proof of letters that were written and the fact that the company even went as far as to take Fanny Mae to court, due to the seriousness of the fraud. The judge ruled that when a company owns a home and they decide to take a loss on that home, that it is that companies decision and nothing can be done. Now they want to collect the money back that they took a loss on and collected tax deductions. Nobody would listen back in 98 when the company I worked with warned of the fraud that was going on, it will be interesting to see what will happen. Wonder if the 750 million that was lost by the banks will show up or ever be found.The banks were given millions by the Bush administration to supposedly jump start the economy but the banks held onto the money and downsized instead of hiring more employees. Of course this is just a short version of the entire story, but I don't feel sorry for Fannie Mae or Freddy Mac IMO they knew this was happening, the only thing they didn't realize is the magnitude of the fraud, had they controlled it from the beginning it would have never happened.

:banghead: Just one of the crooks, Mozilo, totally trashed Countrywide in pursuit of the big bonus. Mozilo was sued, and after admitting neither guilt nor innocence paid a 60 million dollar fine....oh wait insurance paid most of the fine. A bit from a 2008 article and the link below.

http://articles.moneycentral.msn.com/Investing/CompanyFocus/FatCEOPayFedTheMortgageMess.aspx

Countrywide's performance responded, allowing Mozilo to exploit a compensation package that rewarded him for short-term gains. In 2006, Mozilo pocketed a $20.4 million cash bonus because earnings had advanced 4.6% to $4.30 a share. His total compensation that year was $102 million, if you include other kinds of pay and profits on options. Between 2004 and 2007, Mozilo cashed out options worth $414 million.

That's money Mozilo doesn't have to give back, even though Countrywide's fall has cost shareholders 88% losses since the start of 2007."Countrywide is probably the worst example," says Daniel Pedrotty, a corporate governance expert at the AFL-CIO's Office of Investment. But you see the same scenario across the financial sector.