Home loan bank sues major lenders

istockanalyst ^ | 11/19/10 | Ted Evanoff

[FromLori]

America's biggest names in banking have been slapped with a fraud lawsuit in Indianapolis by a home loan bank trying to recover $3 billion.

In a hangover from the 2000s' easy-money spree, the Federal Home Loan Bank of Indianapolis filed the lawsuit on Monday in U.S. District Court.

The lawsuit claims investments bought from 37 banks, including Bank of America, Goldman Sachs and JP Morgan, are based on home loans whose paperwork is riddled with inaccurate appraisals and other flaws.

Federal Home Loan is one of 12 banks in the nation set up by the U.S. government in 1932 to provide money at low interest rates to community banks.

In Indianapolis, the home loan bank bought investments from the national banks separately from its traditional dealings with smaller lenders. There is no sign that the securities it bought were based on mortgages in Indiana.

The home loan bank remains in business and apparently has not cut off lending to its members. It is owned by insurers, commercial banks and savings banks in Indiana and Michigan.

In Indianapolis federal court, the bank has asked Judge William T. Lawrence to rescind deals in which it bought $3 billion worth of securities as investments.

[FromLori]

Related story’s

New York Fed And PIMCO Suing Bank Of America Over Mortgages

http://www.businessinsider.com/bank-of-america-getting-crushed-on-news-that-ny-fed-and-pimco-want-to-put-back-mortgages-2010-10

http://blog.t3live.com/2010/10/ny-fed-joins-pimco-blackrock-in-seeking.html

Fannie, Freddie To Pursue Putbacks, Subpoena JPMorgan, Among Others, In Seeking Loan Level Detail

http://www.zerohedge.com/article/fannie-freddie-pursue-putbacks-subpoena-jpmorgan-among-others-seek-loan-level-detail

[yldstrk]

AWESOME

RIP IT

EXPOSE THOSE VENAL BASTURDS FOR WHO THEY REALLY ARE

WATER BOYS FOR FOR THE DEVIL

[yldstrk]

Romney is despicable

[Alberta's Child]

Very interesting story. Check out Post #61 in the FreeRepublic thread linked below . . . this is the exact scenario I laid out more than a month ago:

Just How Bad Will Foreclosure-Gate Get?

[FromLori]

You nailed it and speaking as someone who lost money in one of those funds and as a taxpayer on the bailout’s I couldn’t be happier. Even if we don’t get any of it back personally it is about time something is done to put an end to the fraud they perpetrated.

Did you see what they are doing now?

Pasco Judge: Explain Why You’re Screwing People

http://www.freerepublic.com/focus/f-news/2629990/posts

[Lurker]

So it begins to unravel.

[The Comedian]

I love it when banks attack banks.

"Economic Holocaust" ping.

Moderate (but increasing) volume ping list.

FReepmail me if you want on or off
The Comedian's "Economic Holocaust" ping list...

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[houeto]

I love it when banks attack banks.

Getting more interesting every day.

[April Lexington]

They accept loans from originating banks. Bundle them. Sell them through Wall Street. Buy the crap back and now they are suing Wall Street? This is interesting...