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Banks to Face Federal Suits over Mortgage Securities

HeadlineSep 02, 2011

The federal agency responsible for overseeing mortgage markets is reportedly set to file a lawsuit against more than a dozen big banks for misrepresenting mortgage securities they sold during the housing bubble that preceded the nation’s financial meltdown. According to the New York Times, the Federal Housing Finance Agency is preparing lawsuits against firms including Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank. The lawsuits will accuse the banks of packaging and selling mortgage securities at inflated prices ultimately borne by U.S. taxpayers when the economy crashed in late 2008.

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