Posted on 09/01/2011 8:31:48 PM PDT by blam
US Preparing To Sue Banks For Billions Over Misrepresenting Safety Of Mortgage Securities
Zeke Miller
Sep. 1, 2011, 10:37 PM
The New York Times scoops that the federal government is preparing to file suit against a dozen major banks in the coming days for their roles in 2008 financial crisis.
The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is alleging that the banks misrepresented the quality of mortgages bundled together as securities — billing subprime loans as secure investments.
Among the banks set to be slapped with lawsuits according to the Times are: Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank. The agency filed suit against UBS earlier this year for $900 million in damages.
Fannie and Freddie lost more than $30 billion during the financial crisis — at least in part due to the bad loans they bought.
The lawsuits are expected to be filed Friday, or else just after the holiday weekend.
(Excerpt) Read more at businessinsider.com ...
Exactly. Banks wouldn’t have loaned this money if they hadn’t been forced into by ACORN/rat Congress and then been told Fannie and Freddie would cover them.
And isn’t Obama still trying for force banks into making loans to ACORN type people?
Our government no longer serves us - we exist to feed it.
Being a retired banker, all I can say is what a farce. Desktop Underwriter was a Fannie product which approved or disapproved a loan at time of application. So now after Fannie approved a loan and it was bundled, it’s the banks fault that some of the loans went bad? What a joke
Will Bwawney Fwank, Chrissy Dodd, and Obozo also be held responsible?????
The lawyers and the lobbyists are salivating, just salivating.
For the proscution:
At a minimum of $1000 per hour for work done by a $30 per hour flunkie, they can keep this gravy train running for the next decade. Let’s supoena 20,000,000 pages of documents; lets call in thousands of expert testimonies; let’s make this into a class action for all those foreclosed on.
For the defense:
At a minimum of $1000 per hour for work done by a $30 per hour flunkie, they can keep this gravy train running for the next decade. Let’s supoena 20,000,000 pages of documents; lets call in thousands of expert testimonies.
Let’s all call our Ferrari dealers now to be sure to get in on the 2016 allotment!
This administration is a total POS!
I agree. Which is also why this suprises me somewhat. If the banks were to fight back for real then politically this could be very bad for the dems.
This entire lawsuit seems as if it would make the entire housing/banking political debate totally front and center going into the election cycle.
The Obama administration must want that thinking though that this will allow them to make the election about a period of time that Bush was President so that they can try to bring back the propaganda of ‘Blame Bush’ without seeming hung up on it. They obviously feel that it was the ‘blame Bush’ propaganda that largely helped Obama get elected and feel that they need it again.
I feel that they may be making a really huge mistake though. Biting off much more then they can chew.
The banks will settle out of court by donating all of their foreclosed properties to the newly legitimized undocumented alien workers who coincidently all registered as Democrats in time for the 2012 elections.
There is another aspect to this as well. How badly will this lawsuit hurt our economy?
Many, myself included, think that the democrats want to destroy this nation. That they want to collapse our economy. Is this intended to do just that?
Marxism feed on misery and class warfare. Despite the cockiness of the democrats I believe that they are in panick mode right now behind closed doors wondering if they can stay a viable party long enough to achieve their socialist/fascist agenda.
This may be an attempt to start going for it all. Collapse the American economy and play the class warfare stradegy to its fullest. Create an economic collapse. Create misery for the American people. Blame the greedy bankers and oil companies and the republicans and set their malcontents into the streets as mobs rioting.
You know, that if this works, the banks will just raise interest loan rates, fees, etc, so effectively it’s a tax. Just like everything else.
Wonder why people in Japan have phones that stream TV for $20 a month? Their government considers bandwidth a public resource that they license to the best and most capable organization that can help the public to use it.
We have “government auctions”...phone companies don’t care if they pay tens of billions for it...because they know that the customers will just have to pay it.
Bottom line, the money has to come from somewhere...namely, your wallet.
“My first reaction was that this is a show trial for Obama far left base in order to get them really riled up that Obama is really fighting against those evil capitalists on Wall Street.
But why would the banks just allow themselves to be damaged this way?”
They won’t. They’ll fight it. But I see two things going on here. First, Obama needs to get money from somewhere to fund his socialist projects and to continue to change America from what it always was to what he wants it to be, his Socialist Utopia (which will actually be a Socialist cesspool). So, he needs money, there isn’t any left, so he will try to rob the banks to get money for his regime to spend up.
Second, Obama is basically more of a Fascist at heart than even a Socialist. Remember, the Fascists were both that and socialistic at the same time. Obama, just like Hitler and his henchmen, exert power over the Industrialists/Bankers of our country, fluctuating between doing them favors and then threatening them in the same breath. It’s how they maintain control over the “monied aristocracy”, alternatively giving with one hand while taking away with the other. A favorite time honored trick of despots throughout history. Putin uses the same techniques over in Russia with the Russian oligarchy. In cahoots with the industrialists, however always letting them know who the actual boss is. Obama doesn’t look like Mussolini with that jutting jawline of his for nothing. He is a petty tinpot dictator in the making if he could get away with it (actually he has been when you think of it, via Executive Orders and Agency regulations).
I know people who believe exactly that. And....I'm not far from believing it myself.
Have you noticed how all the Blacks have been very vocal and public lately with racial taunting as if on que? I believe the DNC told them to get very vocal, quickly.
The progressive movement took over Freddie and Fannie to further their liberal utopia. Like everything else they touch.... it did not work.
However, those in charge of these organizations had the same responsibilities other CEO’s do under the law to report truthfully on the condition of their company and assets. They failed to do this and it’s especially disgusting because these mortgage giants were creations our government. Even worse, they used their massive influence and lobbying along with a willing and complicit media to make efforts to scrutinize and/or reform Freddie and Fannie into an issue of racism. They cooked the books to obtain gigantic bonuses that they never paid back... where are the criminal charges and fines for their crimes?
Is’nt it ironic that the democrats call for more regulation and oversight on Wall Street but the same crooks calling for this were the ones in charge of oversight for Freddie and Fannie. They created the problem. They failed to scrutinize their creations. They arranged the scam so the taxpayers would get stuck with the bill. I guess they had to do that to get the big banks to invest in the toxic mortgages that violated every principle of safe banking.
I am plenty mad at the banks but lest we forget, the Clintons used the Dept of Justice to threaten the banks with racial quota discrimination lawsuits if their loan portfolios (or their political donations?) did not match expected goals. After they beefed up the uber-liberal led mortgage giants to buy up all the mortgages the banks had nothing to lose and everything to gain by making the loans.
When the questionable loans started piling up people were worried. The Fed, Gov’t, and the big Wall Street players jumped in to save the day with the mortgage securities. The Fed and big players winked at everyone and told them these mortgages were backed by the full faith and credit of the United States government. Everyone bought these things and kept the bubble growing until it became impossible to hide the rot in the system and it popped.
The Fed jumped in to save the day because the U.S. Government did not have the money to bail out their creations but all of a sudden big banks were going to fail. It was not just our banks either..... the foreign banks were going to go under too for investing in these things. TARP was born, money was sent to the banks, Americans did not understand exactly what caused the problem. A new kind of politician, born of the same folks who created this mess, stepped forward to become President. The real joke is that he and his friends are the one who created the disaster that vaulted them into power.
That is my tired (plus one beer) summary of what happened. People should be in jail right now. This cost the American people trillions of dollars and my children will get left with the bill. We can’t expect the media to tell the story.... we have to demand answers!
And how much can be taken from the wallets of the American people before the economy collapses?
Thus misery. Malcontents want someone to blame. Thus class warfare.
Blame the bankers. Acorn type mobs have already recently shown up at their homes to intimidate.
Blame the oil companies and their massive profit. Attack energy prices and you increase misery.
Blame the republicans. Get all of the left-wing groups riled up and on the attack.
Claim it is the racism of the republicans and the TEA Party agasinst a black President.
This lawsuit seems geared towards heavy class warfare attacks on republicans and all of the typical groups that the left hates.
Following is excerpt of a lengthy article published Dec.27, 1993 in National Review that the link no longer works. I’ve been all over search engines trying to relocate the article, but without luck. Fortunately I copied it, and maintain the article in my files. It’s by Robert Stowe England, and it’s called “Assault on the Mortgage Industry”. It’s five pages in its entirety, so I don’t jump to load bandwidth with it unless there is a desire by others to spend the time, and read the historical article. It outlines the beginnings of the Clinton gang, and their mischief upon the housing mess.
This excerpt is in the middle of the five page article, and enlightens us on the terminology of Mortgage Banker vs. Mortgage Lender, banks, or Thrifts......:
“HUD is also enrolled in the battle to ferret out “subtle discrimination.” For now it is concentrating on a group of lenders known as “mortgage bankers,” who are not covered by the Community Reinvestment Act. Mortgage bankers do not take deposits and do not hold mortgages in their own portfolios, as banks and thrifts sometimes do. Instead, they sell all their mortgages to investors in the secondary market. These firms are not closely regulated like banks and thrifts; they are therefore not hampered in reaching less profitable markets by the high cost of regulation, and so can be far more aggressive in filling in the gaps in the mortgage market. Ironically, therefore-—in view of HUD’s targeting them—mortgage bankers originate 80 per cent of government-guaranteed Federal Housing Authority (FHA) loans, which disproportionately benefit minorities.
The HUD crackdown on mortgage bankers is being administered by Assistant Housing Secretary Roberta Achtenberg, who before being tapped for the Clinton Administration gained fame in San Francisco for pressuring big corporations to stop funding the Boy Scouts. She has hired an independent testing firm that has been for several months sending out phony black, white, Hispanic, and AsianAmerican mortgage applicants to see if minorities are treated differently from whites. If a single loan officer or other employee in any way treats a single black applicant less favorably than a white applicant, then it can be considered a case of discrimination. Discrimination can be something as simple as not smiling at the black tester, having smiled at the white one.
Miss Achtenberg has considerable leverage against mortgage bankers, since HUD oversees the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Home Association (Fannie Mae), two government-sponsored private enterprises which buy mortgages from mortgage lenders and sell them to investors in the secondary market. If HUD denied a mortgage banker the right to sell its mortgages to Freddie Mac or Fannie Mae, that would force the banker out of business.”
Considering that the democrats used accusations of racism in order to attack the banks and mortgage industry in the first place, I highly suspect that race will play some large role in the attacks used against the banks regarding the dems stradegy with this new lawsuit.
I wonder if Obama’s recent Executive Order that calls for a more ‘diverse’ federal workforce is tied into all of this that is unfolding.
They are getting ready to make huge waves politically using the same cards from their playbook but revamped for Obama and his coming campaign. The ‘race’ card and the ‘class warfare’ card.
I heard someone on the radio a day or so ago (maybe Rush) say that some Federal agencies are already as high as 55% Black.
I expect a White male will never again have a job in the government of this country.
It's time for a revolution!!
Absolutely.
But why would the banks just allow themselves to be damaged this way?
____________________
They have to comply because big government has become big mafia. They threaten lawsuits and new regulation. They decide who is “too big to fail” and who does not matter. They decide the private little bank is in trouble and dissolve it arranging the sale of all assets to “preferred banks” at pennies on the dollar.
The mafia never had it this good anywhere in the world. Big Government has become the ultimate mafia and they control it all.... including law enforcement. They can’t lose. The little banks and big banks only exist because Uncle Sugar allows them too. When they struggle Uncle Sugar decides their fate.
Who is in charge we ask? The same banksters who will soon leave after their “public service” and get multi-million dollar jobs from their old employers. Who are their old employers? The banks that are too big to fail and are given free money to buy smaller banks at pennies on the dollar. It’s pretty good work if you can get it!
I laugh when I hear about the “excesses of Wall Street”. Name any part of government that influences the economy or markets that is not firmly under the control of Wall Street. Look at the cabinet positions, the Fed, regulatory agencies, etc. It’s pure incest.
They created the bubble and made billions. They let the bubble pop and made billions. They are the same people in charge. They can’t lose and they are becoming very wealthy.
We must demand the truth!
What is in that box named “ Pandora”??
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