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Thread: U.S. to sue big banks over mortgage securities: report

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    U.S. to sue big banks over mortgage securities: report

    snip:

    The government will argue the banks, which pooled the mortgages and sold them as securities to investors, failed to perform due diligence required under securities law and missed evidence that borrowers' incomes were falsified or inflated, the Times reported.

    Fannie Mae and Freddie Mac lost more than $30 billion, due partly to their purchases of mortgage-backed securities, when the housing bubble burst in late 2008. Those losses were covered mostly with taxpayers' money.

    http://news.yahoo.com/u-sue-big-bank...031719348.html


    well now isn't this just wonderful?

    the federal government passed legislation to make these loans available for people who coulon't afford them and are now sueing the banks because the banks followed the rules set up by the feds on these loans.

    nothing like creating a problem and then capitalizing on it..

    The eastern world, it is exploding, violence flaring bullets loading. you are old enough to kill , but not for voting, this whole crazy world is just to frustrating, and you tell me over and over and over again my friend, you don't believe we are on the EVE of DESTRUCTION.


    Never approach a bull from the front, A horse from behind, or a fool from any direction.

  2. The Following 2 Users Say Thank You to wingrider For This Useful Post:

    Deadwood (10-24-2012),waltky (10-24-2012)

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    Re: U.S. to sue big banks over mortgage securities: report

    Isn't that the way Greenspan set it up?
    History does not long Entrust the care of Freedom, to the Weak or Timid!!!!! Dwight D. Eisenhower ~

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    Re: U.S. to sue big banks over mortgage securities: report

    Quote Originally Posted by Midwest Media Critic View Post
    Isn't that the way Greenspan set it up?
    Hiya Lo.....how ya doing tonight?
    History does not long Entrust the care of Freedom, to the Weak or Timid!!!!! Dwight D. Eisenhower ~

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    US Sues Bank Of America...

    U.S. sues Bank of America for more than $1 billion for mortgage fraud
    10/24/2012 — The top federal prosecutor in Manhattan sued Bank of America for more than $1 billion on Wednesday for mortgage fraud against Fannie Mae and Freddie Mac during the years around the financial crisis.
    U.S. Attorney Preet Bharara said Countrywide Financial, which was later bought by Bank of America, churned out mortgage loans from 2007 to 2009 without making sure that borrowers could afford them. "The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope," Bharara said in a statement. He said the suit was partly to recover money that Fannie and Freddie lost from defaulted loans. Bank of America had no immediate comment.

    Countrywide sold the loans to Fannie Mae and Freddie Mac, which were left to pay for the loans when they defaulted, according to the lawsuit. Fannie and Freddie were effectively nationalized in 2008. According to the lawsuit, Countrywide used a process called "the Hustle," shorthand for "High-Speed Swim Lane." The idea was that mortgage loans, as they were being processed, would "move forward, never backward." The lawsuit alleged that Countrywide traded quantity for quality and eliminated underwriters, even from mortgage loans for which borrowers did not have to get their income verified.

    Instead, loan processors simply entered data into an automated underwriting system, and if the system gave the go-ahead, "no underwriter would ever see the loan," the lawsuit alleged. With few checks and balances, there was "widespread falsification" of the data entered into the program, Bharara charged.

    Loan processors were given little guidance, the suit said: Checklists for making sure that loans were compliant — for example, assessing whether the income level that a borrower listed was reasonable — were eliminated. Bonuses were based solely on how many loans an employee could process, not the quality.

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