Federal Judge Says FHFA Cases Against Banks Can Proceed
Federal judge says FHFA cases against banks can proceed
NEW YORK, Nov 28 (Reuters) – A U.S. judge kept alive a federal regulator’s lawsuits against big banks including Credit Suisse Group AG and Bank of America Corp over allegations they misled Fannie Mae and Freddie Mac into purchasing billions of dollars worth of risky mortgage debt.
The rulings, by U.S. District Judge Denise Cote in Manhattan, were the latest in a series of decisions allowing the Federal Housing Finance Agency to proceed with lawsuits against banks it blames for losses incurred by Fannie and Freddie.
The FHFA, which regulates Fannie and Freddie, last year sued 18 banks over the housing finance giants’ losses on more than $200 billion in mortgage-backed securities. The lawsuits accuse the banks of misrepresenting the quality of the loans underlying the securities and violating U.S. securities laws.
The banks have denied the regulator’s allegations and argued they should be dismissed. Among the arguments by the defendants is a contention that the lawsuits were filed after the statute of limitations had expired.