Big Mortgage Losses Cause FDIC To Sue Banks

When many people stopped paying their mortgages beginning in 2006 and accelerating over the next few years, the world economy went south. Wall Street gets blamed for inadequately pricing risk. Now big banks are getting sued over mortgage losses.

REUTERS REPORTS: Seeking a combined $92 million, the lawsuits accuse the banks of misrepresenting the risks of residential mortgages they packaged into securities, causing losses for investors once the poor quality and defective underwriting became evident.

The lawsuits were filed on Friday by the law firm Grais & Ellsworth, which has filed many such lawsuits for other clients over residential mortgage securities.

Two FDIC lawsuits were filed in Manhattan federal court and seek a combined $77 million, while a third filed in Los Angeles federal court seeks $15 million.

Bank of America and Citigroup are the only banks named as defendants in all three cases. Deutsche Bank and JPMorgan are defendants in two cases, and Ally Financial Inc, Credit Suisse Group AG , HSBC Holdings Plc , Royal Bank of Scotland Group Plc , UBS AG in one.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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