GSE reform is a coverup for bank fraud; Fannie and Freddie are the victims...

The big banks are our friends *wink *wink

You might take note that there have been no lawsuits filed against the GSEs, they are privately owned by shareholders, and have proven repeatedly to have far better performance than the banks. With a system that places the entire responsibility of both originating and securitizing loans on the banks, there is bound to be major abuse to mortgage consumers. The hybrid system worked for years until the fraudulent activity by banks, many listed below, brought our country to its knees! Just take a look at how the gap between low-income housing and available housing has widened from 2% to 12% since the GSEs were placed into conservatorship, and the government stopped programs that have helped families for decades.

Let's take a look at how the banks have "helped" us out as of late. The list below is by no means complete, but it lists some of the legal action against the banks following the subprime mortgage crisis.

Fannie Mae sues Wall St banks over Libor

By James O'Toole  @jtotoole October 31, 2013: 7:00 PM ET

The suit comes less than a week after a settlement in which JPMorgan agreed to pay Fannie and its sister company, Freddie Mac, $4 billion to settle allegations that it misrepresented mortgage securities sold to the firms.

Fannie says the banks' alleged manipulation of Libor caused it approximately $800 million in losses.

JPMorgan, U.S. in tentative $13 billion settlement

By Evan Perez and James O'Toole  @CNNMoneyInvest October 19, 2013: 5:50 PM ET

JPMorgan Chase and the Department of Justice have tentatively agreed to a $13 billion civil settlement to resolve several investigations into the bank's mortgage securities business, according to a U.S. official familiar with the negotiations.

Fannie and Freddie sustained massive losses on mortgage-backed securities as the housing market imploded, and required a bailout of over $187 billion. The firms, which have been overseen by the FHFA since their 2008 rescue, have since returned to profitability, paying $136 billion in dividends to the Treasury Department.

JPMorgan Could Pay $11 Billion To Settle Mortgage Probes

By MICHAEL VIRTANENPosted: 09/25/2013 2:08 pm EDT  |  Updated: 09/25/2013 4:21 pm EDT

An $11 billion national settlement is under discussion to resolve claims over JPMorgan's handling of mortgage-backed securities in the run-up to the recession, said a government official familiar with ongoing negotiations among bank, federal and state officials.

BofA Gave Bonuses to Foreclose on Clients, Lawsuit Claims

By Hugh Son & David McLaughlin - Jun 14, 2013 9:00 PM PT

We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Gordon said. Managers instructed staff to “delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review,” she said.

US sues Wells Fargo over federally insured loan defaults

Oct. 9, 2012 at 4:46 PM ET

Updated at 6:45 p.m. ET: The U.S. government has sued Wells Fargo Bank in New York, blaming the nation's largest originator of home mortgages for thousands of loan defaults over the past decade.

A civil fraud suit filed in U.S. District Court in Manhattan Tuesday seeks to recover hundreds of millions of dollars that the Federal Housing Administration, which insured the loans, had to pay out after borrowers defaulted.

The lawsuit charges San Francisco-based Wells Fargo with falsely certifying that its loans met the standards necessary to be eligible for government insurance. U.S. Attorney Preet Bharara says the bank's plan to reward employees for the number of loans they approved "was an accelerant to a fire already burning.

HSBC Hit with Foreclosure Suit; FHA's $115 Billion Loss Scenario

JUN 5, 2013 8:54am ET

HSBC Hit with Foreclosure Suit:Eric Schneiderman has struck again. This time it's at HSBC, which, on Tuesday, became the latest bank on the receiving end of a lawsuit from the New York Attorney General. This lawsuit accuses HSBC of ignoring a state law by failing to file forms that would have entitled homeowners facing foreclosure to loan modification negotiations. The Journal reports Schneiderman "may bring actions against other banks over the behavior he alleged against HSBC." He is also still "eyeing" lawsuits against Bank of America and Wells Fargo for violating terms of the national mortgage settlement. 

U.S. Set To File Suits Against Big Banks Over Mortgages

Updated: 11/01/11 06:12 AM ET

WASHINGTON - 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 Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, is expected to file suit against Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among other banks, the Times reported, citing three unidentified individuals briefed on the matter.

The banks 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.

UC Regents, San Diego governments launch LIBOR lawsuit

SAN FRANCISCO | Tue Jun 25, 2013 9:51pm EDT

They all colluded behind our backs and agreed with each other that they would lie and report a different rate," Nishimura said.

"Hard working taxpayers got cheated," Nishimura said. "If they were getting a lower interest rate, they were getting less money than they should have. If they were involved with an instrument where the interest rate was inflated then they could have been paying too much."

According to the UC Regents complaint, the financial institutions acted "in concert to knowingly overstate and understate their true borrowing costs," causing LIBOR to be calculated artificially and they "reaped hundreds of millions, if not billions, of dollars in illegitimate gains.

The two suits allege violations of U.S. and California antitrust laws and name the following institutions as defendants:

Bank of America Corp;
Bank of America NA;
Bank of Tokyo-Mitsubishi UFJ Ltd;
Barclays Bank Plc;
Citigroup Inc;
Citibank NA;
Cooperatieve Central Raiffseisen-Boerenleenbank BA;
Credit Suisse Group AG;
Deutsche Bank AG;
HSBC Bank Plc;
HSBC Holdings Plc;
JPMorgan Chase & Co;
JPMorgan Chase Bank NA;
Lloyds Banking Group Plc;
Royal Bank of Canada;
The Norinchukin Bank;
Societe Generale SA;
The Royal Bank of Scotland Group Plc;
Portigon AG;
WestDeutsche ImmobilienBank AG.

U.S. sues Bank of America over "Hustle" mortgage fraud

(Reuters) - The United States filed a fraud lawsuit against Bank of America Corp, accusing it of causing taxpayers more than $1 billion of losses by selling thousands of toxic mortgage loans to Fannie Maeand Freddie Mac.

“Operating under the motto "Loans Move Forward, Never Backward," mortgage executives tried to eliminate "toll gates" designed to ensure that loans were sound and not tainted by fraud, the government said. This led to "defect rates" that approached 40 percent, roughly nine times the industry norm, but Countrywide concealed this from Fannie Mae and Freddie Mac, and even awarded bonuses to staff to "rebut" the problems being found, it added.” 

Bank of America in $10 billion settlement with Fannie Mae

Bank of America has reached a $10.3 billion settlement with Fannie Mae to deal with questionable home loans it sold to the government-backed mortgage financer during the housing bubble.

BofA (BACFortune 500) will pay $3.55 billion in cash to Fannie as part of the deal. It will also repurchase 30,000 questionable mortgages that are likely to produce losses, paying Fannie $6.75 billion for the loans. The loans had been bundled into mortgage-backed securities, and then were bought and guaranteed by Fannie Mae.

The purchase of bad home loans by Fannie Mae led to massive losses, a government takeover in 2008 and a $116 billion bailout to keep it functioning as a major source of home loans.

The loans were originated between 2000 and 2008 by Countrywide Financial, a leading mortgage and subprime home loan lender that BofA purchased for $4 billion in 2008. The loans covered by the settlement had an original value of $1.4 trillion.

Who's Paying For Citigroup's $968M Fannie Mae Settlement? You Are

7/03/2013 @ 1:30AM

If you feel like you already paid for the financial crisis once or twice, you might have that same old feeling. With failing institutions, lost investments, foreclosed properties and taxpayer funded bailouts, taxpayers got it every which way. And now they could be getting it again.

Citigroup C +0.58% says it will pay $968 million to Fannie Mae to resolve claims it breached representations and warranties on 3.7 million residential mortgages. Citi says the sum is covered by its existing reserves for mortgage repurchases. See Citi To Pay Almost $1B In Fannie Mae Mortgage Settlement. How are taxpayers hurt?


Bank of America to Settle Overdrafts Suit for $410 Million By ANDREW MARTIN

Published: May 23, 2011

Bank of America would pay $410 million to settle its piece of a broad lawsuit involving excessive overdraft fees on debit cards in a deal tentatively approved by a federal judge in Miami on Monday.

The legal action against Bank of America is part of a class-action lawsuit on behalf of consumers. It accuses the nation’s banks of manipulating debit transactions to maximize the fees they could charge customers who exceeded the balance in their accounts.

Bank of America was the first defendant to settle in the case, said Robert Gilbert, one of the plaintiff lawyers. There are roughly 30 remaining defendants, including JPMorgan Chase, Wells Fargo, U.S. Bank, and Citibank, he said.


Now, after all of those lawsuits against the banks (private sector companies), don’t you feel much better about House Republicans legislation to eliminate the, historically better performing, GSEs role in providing liquidity? Good, didn't think so! Really – the banks just want to be our friends! *wink *wink

Let's have a quick look at some of the banks that Fannie Mae has a lawsuit filed against for mortgage fraud:

Ally Financial (ex-GMAC), $6 billion

Bank of America Corp., $6 billion

Barclays Bank, $4.9 billion

Citigroup, $3.5 billion

Countrywide, $26.6 billion

Credit Suisse Holdings USA, $14.1 billion

Deutsche Bank, $14.2 billion

First Horizon National, $883 million

General Electric, $549 million

Goldman Sachs, $11.1 billion

HSBC North America, $6.2 billion

J.P. Morgan Chase, $33 billion

Merrill Lynch/First Franklin Financial, $24.853 billion

Morgan Stanley, $10.58 billion

Nomura Holding America Inc., $2 billion

Royal Bank of Scotland Group, $30.4 billion

Societe Generale, $1.3 billion

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