U.S. Gov't Readying Billion-Dollar Suits Against Big Banks

Published on:
2 September 2011 at 08:02 a.m. ET

http://www.insidearm.com/news/00013399-us-govt-readying-billion-dollar-suits-aga/

The U.S. government agency that oversees mortgage companies is getting ready to launch massive lawsuits against the largest mortgage lenders that will seek to recover billions, according to The New York Times.

The Federal Housing Finance Agency will be filing lawsuits in coming days against Bank of America, JP Morgan Chase, Goldman Sachs, Deutsche Bank, and others.

At issue is the packaging and reselling of mortgage-backed securities in the mid-2000s that led to a global financial crisis. The government’s standing in the case stems from the $30 billion Fannie Mae and Freddie Mac lost when they invested in the securities or the mortgages that were backing the securities.

None of the banks named in the Times story would comment, as the suits have yet to be filed.