The Federal Housing Finance Agency (Fhfa), the American agency that oversees the mortgage giants Fannie Mae and Freedie Mac, is preparing a legal action against twelve banks, accused of having engaged in fraudulent behavior in the valuation of securities linked to subprime mortgages they were at the root of the real estate bubble that exploded in 2007. The New York Times reports it in its online edition.
Some of the major banking institutions in the world are involved, such as Bank of America, Jp Morgan Chase, Goldman Sachs and Deutsche Bank, guilty above all of having inflated the incomes of debtors who would later prove unable to pay the installments. The court notification is expected today, but will arrive no later than next Tuesday.
The subprime mortgage crisis cost Fannie Mae and Freddie Mac an estimated $30 billion, losses mostly covered by US taxpayers. The FHFA had already opened a dispute with UBS, in an attempt to recover 900 million dollars. The mechanism of the new lawsuit should be similar.
