Posted: 9/2/11 09:05 PM ET
The allegations by the Federal Housing Finance Agency, which is seeking unspecified compensation, penetrate the heart of Wall Street’s role in helping lead the economy to ruin. The FHFA claims these institutions knowingly peddled shoddy deals without informing investors. When the housing market crashed, and those deals went south, the damage rippled through economies around the globe, plunging nations into recession.
The legal action, which comes in addition to separate allegations of dubious mortgage and foreclosure practices at some of these banks, may roil financial markets next week, and is likely to have dramatic political consequences for the Obama administration. The banks, some of which have lately been subjected to punishing speculation about the adequacy of their capital reserves, could face massive losses. A spokeswoman for the FHFA said it was “premature” to judge what the actual penalties from Friday’s lawsuits might be.
Full Story Here: http://www.huffingtonpost.com/2011/09/02/banks-sued-subprime-mortgage-deals_n_947349.html
The legal action, which comes in addition to separate allegations of dubious mortgage and foreclosure practices at some of these banks, may roil financial markets next week, and is likely to have dramatic political consequences for the Obama administration. The banks, some of which have lately been subjected to punishing speculation about the adequacy of their capital reserves, could face massive losses. A spokeswoman for the FHFA said it was “premature” to judge what the actual penalties from Friday’s lawsuits might be.
Full Story Here: http://www.huffingtonpost.com/2011/09/02/banks-sued-subprime-mortgage-deals_n_947349.html
