US to sue big banks over risky mortgages
Published reports say the U.S. government is planning to sue some of the country's largest banks over mortgage-backed securities they sold that lost value in the housing market collapse, alleging they misclassified their quality.
The reports say the government would seek billions of dollars in losses in compensation. The reports cited people that were not identified.
The New York Times and The Wall Street Journal say the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac, could file a lawsuit within days.
The reports say securities that were backed by subprime and other risky loans but were deemed safe investments by ratings agencies are the ones at issue in this case.
The Times says the FHFA would not seek recovery of the total amount of the loans because some still have value.
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- Evening News, May 22, 2013