List of Banks Sued by the Government

Sep 5, 2011
J. Webster
Comments Off on List of Banks Sued by the Government

To me, this seems just crazy. First the government bails out all the banks and now they want to sue them. In a way it seems like a drug dealer being sued by a drug addict if they sell them a bunch of junk they doesn’t get them high. To say Fannie Mae and Freddie Mac didn’t know what they were getting into when they were buying this mortgage-backed securities seems absurd.

Sure, there was a huge amount of deception going on in the financial system back in 2007-2008 and the years leading up to the collapse. However, weren’t all the banks, Fannie Mae and Freddie Mac included, and the rating agencies complicit in the debacle? Seems like the government made some very poor decisions and they’re not trying to blame someone else. Who was doing Fannie and Freddie’s due diligence at the time is the bigger question?

To say the one company or bank is to blame is ludicrous. They were all at fault. Now, the suit and further lawsuits only creates a drag on the recovery. The housing market is already at a standstill. Now, what with the banks having to deal with lawsuit after lawsuit, how can they make loans and function? What can be done? Well, the government can make lawsuits but they need to act fast and compromise – meet half way with all of these banks. If they don’t, they we’ll only see a stagnant housing market for years to come. And then we’ll all be asking why we bailed them out in the first place.

This is a list you don’t want to be on if you’re a bank. Included below is the amount in mortgage backed securities the institutions are said to have sold to the government mortgage buyers:

— JPMorgan Chase & Co., $33 billion

— The Royal Bank of Scotland Group PLC, $30.4 billion

— Countrywide Financial Corp. (now a unit of Bank of America), $26.6 billion

— Merrill Lynch & Co./First Franklin Financial Corp. (now a unit of Bank of America), $24.9 billion

— Deutsche Bank AG, $14.2 billion

— Credit Suisse Holdings (USA) Inc., $14.1 billion

— Goldman Sachs Group Inc., $11.1 billion

— Morgan Stanley, $10.6 billion

— HSBC North America Holdings, Inc., $6.2 billion

— Ally Financial Inc., formerly known as GMAC LLC, $6 billion

— Bank of America Corp., $6 billion

— Barclays Bank PLC, $4.9 billion

— Citigroup Inc., $3.5 billion

— Nomura Holding America Inc., $2 billion

— Societe Generale, $1.3 billion

— First Horizon National Corporation, $883 million

— General Electric Co., $549 million

Source: Business Week

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