Washington - Bna
The U.S. Government is going to sue more than 12 big banks for misrepresenting quality of mortgage securities according to the New York Times. The Federal Housing Finance Agency oversees mortgage giants Fannie Mae and Freddie Mac. It is expected to file suit against more than a dozen banks including Bank of America, JP Morgan Chase, Goldman Sachs and Deutsche Bank. According to reports the suits stem from subpoenas the finance agency issued to banks a year ago. The suits will argue the banks which assembled the mortgages and marketed them as securities to investors failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified.