US Sues Banking Giants Over $200B In Failed MBS

Law360, New York (September 2, 2011, 2:01 PM EDT) -- The federal agency overseeing Fannie Mae and Freddie Mac sued 17 of the world's largest banks Friday, alleging they made false statements about the quality of nearly $182 billion in residential mortgage-backed securities the mortgage giants purchased during the housing bubble.

In a series of 17 complaints filed in federal court in New York and Connecticut, as well as the New York Supreme Court, the Federal Housing Finance Agency alleges the banks misrepresented the risks inherent in the private-label MBS, including the creditworthiness and incomes of...
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