PropertyProf Blog

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Univ. of Arkansas, Fayetteville

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Friday, September 2, 2011

FHFA to file suit against the big banks

This week has been good news/bad news for Bank of America.  Good news -- Warren Buffet invested $5 billion in new preferred shares, and gave investors a confidence boost in the bank.  Bad news -- the New York Times reports this morning that the Federal Housing Finance Agency (FHFA), the "conservator" agency over Fannie Mae and Freddie Mac, is preparing to file a lawsuit against Bank of America, JP Morgan Chase, Goldman Sachs, Deustche Bank, and others, alleging that the due diligence that they conducted on residential mortgages prior to securitizing and selling them, violated federal securities law.  This is, of course, in addition to the actions of the 50 state attorneys general, the $10 billion lawsuit by AIG against Bank of America, and the lawsuits by various private investors.

In other words, this is the perfect semester for me to be teaching my seminar on the Financial Crisis. 

Tanya Marsh

http://lawprofessors.typepad.com/property/2011/09/fhfa-to-file-suit-against-the-big-banks.html

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