NYTimes reports that The Federal Housing Finance Agency (FHFA), which oversees mortgage giants Fannie Mae and Freddie Mac, is ready to file suit against over a dozen major banks, alleging they misrepresented the quality of the mortgage securities. The FHFA legal actions will argue that banks failed to perform proper due diligence, missing evidence that borrowers’ incomes were inflated or falsified. The cases will be filed in the in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs, Deutsche Bank and others. The suits stem from subpoenas the FHFA issued to banks a year ago. If the case is not filed Friday, sources said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims.
(Graphic credit: FHFA logo)