WASHINGTON (Reuters) - The agency that oversees mortgage markets is preparing to file suit against more than a dozen big banks, accusing them of misrepresenting the quality of mortgages they packaged and sold during the housing bubble, The New York Times reported on Thursday.
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.
I wish my losses were covered by taxpayers...
Let's wait and see if anything actually comes of this.
I am not your rolling wheels, I am the highway
I am not your carpet ride I am the sky
I am not your blowing wind, I am the lightning
I am not your autumn moon, I am the night