Fannie and Freddie to sue big banks over mortgages
The NY Times reports that "the federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation."
And the first thing that popped into my mind when I saw this was OK, the banks were bailed out by the taxpayers during the height of the financial crisis, Fannie and Freddie are wards of the state (meaning that the taxpayers are covering their losses) so let's just say the government wins this suit, who is actually going to pay who.
And Tom Rood who worked at Fannie Mae until 2006 and is now a partner at the Collingwood Group which advises banks and servicers on housing related issues had a similar thought, "While I believe that F.H.F.A. is acting responsibly in its role as conservator, I am afraid that we risk pushing these guys off of a cliff and we're going to have to bail out the banks again." (emphasis added}
I'm sure the attorneys will make out just fine. The taxpayers maybe not so well.
Incidentally, the figurine pictured at the left was made by Russ Berrie and Co., a firm I began my career with in the gift and home decor industry long before I became a Charleston real estate agent.