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FHFA Lawsuit vs Bank of America, Merrill & Countrywide

Posted By Barry Ritholtz On September 2, 2011 @ 10:47 pm In Bailouts,Credit,Legal | Comments Disabled

While the Feds have been pressuring the State AGs about the misshapen, federally bailed out banks, perhaps they should have been more concerned about a legal team in DC.

The Federal Housing Finance Agency (FHFA) is seeking to rescind numerous transactions, and is looking for additional claims, civil penalties and punitive damages in cases alleging misconduct.

I presume the cases, filed on behalf of Fannie Mae and Freddie Mac, involve a fiduciary obligation to Fannie & Freddie (i.e., taxpayers) as Conservator — and  not the White House. Hence, we shall see how this develops, and if the banker loving Congress AND President will wrongheadedly intervene.

Consider the numbers just versus Bank of America and holdings:

• Bank of America suit covers $6 billion in securities (PDF [1])

• Merrill Lynch suit covers $24.8 billion in securities (PDF [2])

• Countrywide suit covers $26.6 billion in securities (PDF [3])

Total:  $57.4 billion

In addition to Bank of America/Merrill Lynch, the FHFA also filed complaints against JPMorgan, Citigroup, Goldman Sachs, Barclays, Nomura Holdings, HSBC Holdings, Societe Generale SA, Credit Suisse, Deutsche Bank and First Horizon National Corp in federal court in Manhattan.They also sued Ally Financial, Countrywide Financial Corp, General Electric Co. and Morgan Stanley in state court in Manhattan, and sued Royal Bank of Scotland Group Plc in federal court in Connecticut.

There is a lot more here than meets the eye . . .

~~~


For more info, see:

• FHFA Filings in PLS Cases, September 2, 2011 (FHFA.gov [4])

• Federal government sues major banks over Fannie and Freddie losses (Washington Post [5])

• Federal Regulators Sue Big Banks Over Mortgages (NYT [6])

• Big Banks Face Suits on Mortgage Bond Losses (WSJ [7])

• Bank of America, JPMorgan Among 17 Banks Sued by U.S. for $196 Billion (Bloomberg [8])

FEDERAL HOUSING FINANCE AGENCY

FHFA Filings in PLS Cases, September 2, 2011:
Ally Financial Inc. f/k/a GMAC, LLC
Bank of America Corporation
Barclays Bank PLC
Citigroup, Inc.
Countrywide Financial Corporation
Credit Suisse Holdings (USA), Inc.
Deutsche Bank AG
First Horizon National Corporation
General Electric Company
Goldman Sachs & Co.
HSBC North America Holdings, Inc.
JPMorgan Chase & Co.
Merrill Lynch & Co. / First Franklin Financial Corp.
Morgan Stanley
Nomura Holding America Inc.
The Royal Bank of Scotland Group PLC
Société Générale
FEDERAL HOUSING FINANCE AGENCY, AS CONSERVATOR FOR THE FEDERAL NATIONAL MORTGAGE ASSOCIATION AND THE FEDERAL HOME LOAN MORTGAGE CORPORATION v. UBS AMERICAS INC., UBS REAL ESTATE SECURITIES INC., UBS SECURITIES, LLC, MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.  DAVID MARTIN, PER DYRVIK, HUGH CORCORAN, and PETER SLAGOWITZ


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2011/09/fhfa-lawsuit-vs-bank-of-america-merrill-countrywide/

URLs in this post:

[1] PDF: http://www.fhfa.gov/webfiles/22586/FHFA%20v%20BoA%20Other.pdf

[2] PDF: http://www.fhfa.gov/webfiles/22595/FHFA%20v%20Merrill%20Lynch.pdf

[3] PDF: http://www.fhfa.gov/webfiles/22596/Final%20Countrywide%20Complaint%20-%20Filing%20Copy.pdf

[4] FHFA.gov: http://www.fhfa.gov/Default.aspx?Page=110

[5] Washington Post: http://www.washingtonpost.com/business/economy/federal-government-to-sue-major-banks-over-fannie-and-freddie-losses/2011/09/02/gIQAPom7wJ_print.html

[6] NYT: http://www.nytimes.com/2011/09/03/business/bank-suits-over-mortgages-are-filed.html

[7] WSJ: http://online.wsj.com/article/SB10001424053111904583204576545480182802192.html

[8] Bloomberg: http://www.bloomberg.com/news/2011-09-03/jpmorgan-bofa-among-17-banks-sued-by-fhfa-over-196-billion-in-securities.html

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