It's beginning

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Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
It's beginning

 

Federal Home Loan Bank sues Wall Street Banks for Billions

Today the Federal Home Loan Bank of San Francisco (Bank) filed complaints in the Superior Court of California, County of San Francisco, against nine securities dealers in relation to certain of the Bank’s investments in private-label residential mortgage-backed securities (PLRMBS). The Bank is seeking to rescind its purchases of 134 securities in 113 securitization trusts, for which the Bank originally paid more than $19.1 billion. The Bank’s complaints allege that the dealers made untrue or misleading statements about the characteristics of the mortgage loans underlying the securities.

 

All of the PLRMBS in the Bank’s mortgage portfolio, including those identified in the complaints filed today, were rated AAA when purchased, based on the information provided by the securities dealers.

From Grechen Morgenson at the NY Times: Pools That Need Some Sun

The suit, filed March 15 in state court in California, seeks the return of the $5.4 billion as well as broader financial damages.

...

The defendants in the Federal Home Loan Bank case were among the biggest sellers of mortgage-backed securities back in the day; among those named are Deutsche Bank; Bear Stearns; Countrywide Securities, a division of Countrywide Financial; Credit Suisse Securities; and Merrill Lynch. The securities at the heart of the lawsuit were sold from mid-2004 into 2008 ...

 

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2259
Re: It's beginning

This will be interesting to watch unfold!

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: It's beginning

It will not unfold, it will refold out of sight and out of mind. Documents will disappear, people will forget names and dates, and huge payoffs will be made. Three  of the companies are no longer around. Interestingly no Goldman Sachs which opens the possibility of another scenario. The defendants will go down therefore eliminating more of the competition which is after all a sin.

Ultimately  i will go with scenario number one since both banks were beneficiaries of the bailouts.

V

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: It's beginning
V wrote:

It will not unfold, it will refold out of sight and out of mind. Documents will disappear, people will forget names and dates, and huge payoffs will be made. Three  of the companies are no longer around. Interestingly no Goldman Sachs which opens the possibility of another scenario. The defendants will go down therefore eliminating more of the competition which is after all a sin.

Ultimately  i will go with scenario number one since both banks were beneficiaries of the bailouts.

V

All I can picture is Arthur Anderson shredding at Enron. I myself don't think it will get to the Kennie Boy Lay status. I see quick settlements offering no admission of guilt, payments done by the Fed - a la 9/11 where the government paid. But between this and the criminal case in Italy - it is pleasant reading.

Just the sameCool

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