The FHFA filed lawsuits last Friday alleging nearly $200 billion in fraud by the nation's biggest banks. Could this be the beginning of accountability for the banksters?
September 6, 2011
It was Friday afternoon, near market closing time, when the Federal Housing Finance Agency filed lawsuits against 17 big banks for their role in the subprime mortgage crisis that created, in turn, the financial crisis we're still struggling with today.
The suits accuse the banks of fraud, of lying to the federal government and to investors about the quality of the securities they were making by cranking out more and more subprime loans. The charge allows the FHFA to ask for punitive damages as well as actual damages. The amount of the suits is not yet known, but they allege nearly $200 billion in fraudulent securities were sold just to Fannie Mae and Freddie Mac, the government-backed (and now, post-bailout, basically government-owned) mortgage lenders.
The news was big, yet it was dropped in the Friday news-dump hole before a holiday weekend, probably to try to mitigate its impact on stock prices. (Markets also take a day off for Labor Day, though one has to doubt they thank workers for the rest.) Otherwise, you'd think they would have broken the news in a big way on a day when people might actually be paying attention.
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