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The Feds file suit against 17 lenders

By
Real Estate Agent with Harvest Realty

In a press release issued on Friday afternoon, the Federal Housing Finance Authority announced that they are filing suits against 17 lenders to recover losses to Fannie Mae and Freddie Mac.  The suits are being filed against not only the financial institutions, but certain officers and some underwriters.  The following is a list (in alphabetical order) of the financial institutions:

1     Ally Financial Inc. f/k/a GMAC, LLC

2.    Bank of America Corporation

3.    Barclays Bank PLC 

4.    Citigroup, Inc.

5.    Countrywide Financial Corporation 

6.    Credit Suisse Holdings (USA), Inc.

7    Deutsche Bank AG 

8.    First Horizon National Corporation

9.    General Electric Company 

10.    Goldman Sachs & Co.

11.    HSBC North America Holdings, Inc.

12.    JPMorgan Chase & Co. 

13.    Merrill Lynch & Co. / First Franklin Financial Corp.

14.    Morgan Stanley 

15.    Nomura Holding America Inc.

16.    The Royal Bank of Scotland Group PLC 

17.    Société Générale

For copies of the specific court filings against each of the financial institutions, you can visit the FHFA web page about this situation.  Rather than attempt to explain the situation this link can be used to review the recent filings.  Or you can view the FHFA press release.

 For information about one of the most affordable real estate markets in the United States, you can visit my website about Indianapolis-Carmel Indiana real estate.  Or feel free to contact me about some of the opportunties that exist in both regular listings, and foreclosures and short sales.  In recent years surveys have determined that the Indianapolis-Carmel Indiana market area has housing prices that are well supported by the underlying household incomes in the area.

Show All Comments
Andrea Peters
Cortiers Real Estate - College Station, TX
REALTOR, ABR, e-PRO, SRS

I wonder how these battles will go. It'll be interesting to follow.

Sep 02, 2011 12:55 PM
Dan Rosenberger
Harvest Realty - Westfield, IN

Andrea, This will probably hurt some of these large banks.  And we are supposed to be beyond the era of too big to fail.

I agree, it will be interesting to follow.  I wonder if Warren Buffet has any second thoughts about having invested $5 billion in Bank of America last month.

Sep 02, 2011 01:51 PM
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

My question is one of timing. Why Now? Statute of limitations has not run out.

Sep 02, 2011 04:50 PM
Scott Hayes
(512) 786-8300 - Austin, TX
Realty Austin, Broker Associate

Agree with Mike. Makes me wonder why now

Sep 03, 2011 03:11 AM
Rachel Hunt
Reece & Nichols - Overland Park, KS

Do you think the FHFA has enough ground to stand on?  It seems like a stretch.

Sep 03, 2011 04:01 AM
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

Rachel, they have more than enough to make a case on. Once discovery starts, look out. Skeleton will fall out of the closet by the thousands. Just the discovery phase will take years.

I can hear industrial shredders firing up across the universe. You'll hear the the 5th Amendment invoked till our collective noses bleed.

Sep 03, 2011 05:59 AM
Dan Rosenberger
Harvest Realty - Westfield, IN

Mike and Scott - I did read something about how there was a statute of limitations coming up soon and that was a factor in the timing of the suit.  While the suit may well have some good reasons behind it, I would think that it is a blow to some of these banks, particularly Bank of America.  BOA's recent troubles have been well-publicized.  Banks not only need sound balance sheets.  They also need confidence of customers and investors.

Sep 03, 2011 06:34 AM
Dan Rosenberger
Harvest Realty - Westfield, IN

Rachel - Obviously there were some lax standards in writing many of these loans.  In hindsight it is easy to say that the quality of the mortgages was suspect.  Like Mike says these cases could drag on for years and bring out some very interesting facts. 

Sep 03, 2011 07:29 AM
Richard Glesser
North Country Appraisal Services - Gaylord, MI

I believe the Statute of Limitations expires this upcoming Thursday so it was imperative to file.  The government has already been negotiating with many of these lenders who have stalemated the talks hoping to get beyond the Statute date.  We can only hope that this will compell the lenders to get serious about a settlement which will, unfortunately, be costly to the taxpayers.  The arrogance of the lenders in response to the suit reflects their long standing contempt for regulation and morality.  Until we break the bond between politicians and Wall Street, the abuse of the consumers will continue.

Sep 04, 2011 05:57 AM
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