Washington – A US based federal agency has filed lawsuits against 17 financial institutions, including Indian-American CEO Vikram Pandit-led Citigroup, in an attempt to recover billions of dollars in losses from mortgage investments.<\/p>\n
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Besides Citigroup, the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, Friday filed lawsuits against Bank of America, Goldman Sachs, JPMorgan Chase and several other largest Wall Street and financial firms.<\/p>\n
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FHFA contends the institutions misrepresented the quality of the investments’ underlying loans.<\/p>\n
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The misrepresentations included significantly overstating borrowers’ ability to repay their mortgages, the number of loans on owner-occupied properties and amount of debt on those homes relative to their values.<\/p>\n
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Fannie Mae and Freddie Mac bought more than $196 billion of these residential mortgage-backed securities from the named financial institutions in the middle of the last decade, according to the suits.<\/p>\n
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These bundles of home loans were hot investments during the housing boom, helping fuel the proliferation of mortgage lending and run up in home prices. But when the market crashed and homeowners defaulted in droves, the securities plummeted in value.<\/p>\n
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Fannie Mae and Freddie Mac, which were among the biggest purchasers of these securities, also got caught in the downdraft.<\/p>\n
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Fannie Mae and Freddie Mac, which were taken into conservatorship by the federal government during the 2008 financial crisis, are the largest sources of funding for the US housing market.<\/p>\n","protected":false},"excerpt":{"rendered":"
Washington – A US based federal agency has filed lawsuits against 17 financial institutions, including Indian-American CEO Vikram Pandit-led Citigroup, in an attempt to recover billions of dollars in losses from mortgage investments. Besides Citigroup, the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, Friday filed lawsuits against Bank […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[5069,5068,5067],"class_list":["post-13059","post","type-post","status-publish","format-standard","hentry","category-top-law-news","tag-financial-firms","tag-mortgage-losses","tag-us-sues-financial-firms"],"yoast_head":"\n