SEC=UGA Posted September 2, 2011 Share Posted September 2, 2011 (CBS/AP) The U.S. federal government agency in charge of overseeing Fannie Mae and Freddie Mac is set to sue a dozen of the world's largest banks, alleging the lenders misrepresented the value of mortgage securities sold on before the housing bubble burst, the New York Times reported Thursday night. The Times says the Federal Housing Finance Agency will file lawsuits by early next week seeking billions of dollars in compensation from Bank of America, JPMorgan Chase and Goldman Sachs, in addition to Germany's Deutsche Bank, among others. The FHFA faces a Tuesday deadline to file the suits. According to the article, the agency claims the big banks bundled together mortgages, many of which should never have been granted in the first place, and then sold them on as securities without performing due diligence that would have revealed the borrowers incomes were deliberately overstated - making the mortgages a huge liability rather than a sound investment. S&P gives subprime mortgages AAA rating Video: House prices down, sales down even further Video: Fannie Mae foreclosure sell-off destroying neighborhood The oversold, or subprime mortgages, as they became known, were the root cause of the mortgage crisis which tore through the U.S. economy and continues to plague the housing market today. The Associated Press reports, meanwhile, that counties across the U.S. are discovering that illegal or questionable mortgage paperwork is far more widespread than thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years. Already, mortgage papers are being invalidated by courts, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on homes. The findings by various county registers of deeds have also hindered a settlement between the 50 state attorneys general who are investigating big banks and other mortgage lenders over controversial mortgage practices. The problem of shoddy mortgage paperwork, which comprises several shortcuts known collectively as "robo-signing," led the nation's largest banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., and other lenders to temporarily halt foreclosures nationwide last fall. At the time, "robo-signing" was thought to be contained to the affidavits that banks file when a mortgage is issued and somebody buys a house. The documents are used to prove they have the right foreclosure if the homeowner isn't making mortgage payments. Companies that process mortgages said they were so overwhelmed with paperwork that they cut corners. But now, as county officials review years' worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures - either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork - on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found. "Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C. In Guilford County, where Greensboro is located, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures. Thigpen says his office received 456 more documents with suspect signatures from Oct. 1 through June 30. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted September 2, 2011 Share Posted September 2, 2011 I think its a great idea. Rather than sue them 2 years ago (the judgements would never have been paid because they then would have filed bankruptcy), the government made sure they stayed afloat and, IMO, in the process saved our nation from an epic disaster....and now are letting them know that the behaviors that led to them getting in that mess in the first place won't be tolerated. Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted September 2, 2011 Share Posted September 2, 2011 I think its a great idea. Rather than sue them 2 years ago (the judgements would never have been paid because they then would have filed bankruptcy), the government made sure they stayed afloat and, IMO, in the process saved our nation from an epic disaster....and now are letting them know that the behaviors that led to them getting in that mess in the first place won't be tolerated. You're right. But after we sue them we should still shoot them. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 2, 2011 Share Posted September 2, 2011 You're right. But after we sue them we should still shoot them. + infinity Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted September 2, 2011 Author Share Posted September 2, 2011 I think its a great idea. Rather than sue them 2 years ago (the judgements would never have been paid because they then would have filed bankruptcy), the government made sure they stayed afloat and, IMO, in the process saved our nation from an epic disaster....and now are letting them know that the behaviors that led to them getting in that mess in the first place won't be tolerated. Won't they potentially fail when we take all of their money away from them? And then won't we have to bail them out again? Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted September 2, 2011 Share Posted September 2, 2011 Won't they potentially fail when we take all of their money away from them? Go have a look at their ridiculous profits from the last couple quarters (hell, years), as well as the equity in their stock. If the gov't sues for even half of that, everyone will have come out ahead. 2nd quarter numbers: – Profits at JPMorgan Chase, the nation’s second largest bank, were up 13 percent. – Third-largest Citigroup’s profits soared 23 percent. – Fourth-largest Wells Fargo’s profits shot up 29 percent. – Fifth-largest Goldman Sachs, meanwhile, “disappointed investors” when it merely “more than doubled its profits.” –Sixth-largest Morgan Stanley’s profits were up an impressive 17 percent. Quote Link to comment Share on other sites More sharing options...
Pope Flick Posted September 2, 2011 Share Posted September 2, 2011 Won't they potentially fail when we take all of their money away from them? And then won't we have to bail them out again? So now you want "Too rich to sue"? Figures. Quote Link to comment Share on other sites More sharing options...
delusions of grandeur Posted September 2, 2011 Share Posted September 2, 2011 Go have a look at their ridiculous profits from the last couple quarters (hell, years), as well as the equity in their stock. If the gov't sues for even half of that, everyone will have come out ahead. 2nd quarter numbers: Precisely... I knew right when I read it that they're still going to come out ahead in all of this, and face no real penalty compared to their wrong-doings... This corporate socialism "too big to fail" is such a load of crap... Have they even done anything to help out those who were the victims of predatory lending? Not saying they should get a free pass either, but if the banks are getting a "too big to fail" pass... And according to that article it sounds like they're continuing to cause big problems for mortgagees (mortgagers? I dunno), while these banks are getting off relatively scott free. We really need to be prosecuting these people who knew what they were doing was wrong, rather than expecting that the gov't is actually competent and willing to sue them for the full sum of the damage they've done. Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted September 2, 2011 Share Posted September 2, 2011 The government didn't bail out the banks for only the banks sake, but rather to prop up the economy. They should have just seized their assets and fired their management. I guess that line of thinking makes me a commie but so be it. Quote Link to comment Share on other sites More sharing options...
Pope Flick Posted September 2, 2011 Share Posted September 2, 2011 The government didn't bail out the banks for only the banks sake, but rather to prop up the economy. They should have just seized their assets and fired their management. I guess that line of thinking makes me a commie but so be it. That actually happened at quite a few banks, just not the super big ones. There's a great NPR piece (maybe it was Planet Money) on it from around/spring 09 how the govt agents would meet in the parking lot at 430 on a Friday, then march in with 5 minutes left in the day and telling all the employees they're working late and all weekend to re-open with a proper balance sheet by Monday morning. It was pretty interesting stuff. Quote Link to comment Share on other sites More sharing options...
delusions of grandeur Posted September 2, 2011 Share Posted September 2, 2011 The government didn't bail out the banks for only the banks sake, but rather to prop up the economy. They should have just seized their assets and fired their management. I guess that line of thinking makes me a commie but so be it. Yes, we all know their "reasoning" behind it, but don't you think it's more socialist to bail a company out for any reason, let alone taking advantage of it's standing? Capitalism is based on the idea that the strongest survive, not that your size should necessitate that you get priveleges that others don't... It's simply not right, and I don't entirely buy that we'd be in any more of a mess by letting them reap what they sow... They basically got kickbacks by funding both sides of the election to make up for their misdeeds. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 3, 2011 Share Posted September 3, 2011 Capitalism is based on the idea that the strongest survive, not that your size should necessitate that you get priveleges that others don't... Capitalism also requires competition, responsibility and sensible rules. When the memories of the depression had faded sufficiently, the greed merchants came out of the woodwork once again and bribed their puppets to repeal Glass-Steagall, enabling the banks to become more corrupt and "too big to fail". Capitalism is a wonderful thing but unless the rules are observed and stringently enforced for the maximum benefit of all, it's not going to work as it should. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted September 3, 2011 Share Posted September 3, 2011 Go have a look at their ridiculous profits from the last couple quarters (hell, years), as well as the equity in their stock. If the gov't sues for even half of that, everyone will have come out ahead. 2nd quarter numbers: The missing bank is Bank of America. They just made the mistake of acquiring Countrywide. What a doozy of a mistake, though. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted September 3, 2011 Share Posted September 3, 2011 Go have a look at their ridiculous profits from the last couple quarters (hell, years), as well as the equity in their stock. If the gov't sues for even half of that, everyone will have come out ahead. 2nd quarter numbers: Hate to point out the obvious here, but those percentages don't tell you a damn thing. If they had profits of a whole 1% last year, and 1.13% this year, then that's a "ZMOG 13% INCREASE!" Just saying... Quote Link to comment Share on other sites More sharing options...
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