Why Are Big Banks Going To War With A Federal Judge?
The nation’s largest banks have devised a novel way to protect their interests and save themselves from hundreds of billions of dollars in legal exposure. They’re taking a judge to court.
Lawyers for 17 banks submitted an unusual filing in the Second Circuit Court of Appeals this week (just listing all the corporate lawyers involved takes up the first four pages). The banks – including JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Citigroup and Morgan Stanley – stand accused of ripping off the mortgage giants Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, Fannie and Freddie’s conservator, alleges that these banks improperly sold $200 billion worth of mortgage-backed securities without disclosing the shoddy underwriting of the underlying loans. FHFA argues the banks knew the loans in the securities were bad, yet sold them to Fannie and Freddie anyway, leading to massive losses and the need for a government bailout. So FHFA wants the banks to buy back the securities they improperly sold under false pretenses.
U.S. District Court Judge Denise Cote took over the case in December, 2011, and quickly made a series of rulings in the case, first denying a motion by the banks to dismiss the lawsuit. The bank lawyers have become so dissatisfied with Cote’s rulings, in fact, that they have asked the Second Circuit to reverse them. The filing calls for a “writ of mandamus” that would throw out a series of rulings around discovery, which the bank lawyers claim “deprived Petitioners of their right to obtain evidence.” (You can chew for a moment on the idea that banks are being deprived of their rights.)
Rest here…
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http://www.fhfa.gov/webfiles/22595/fhfa%20v%20merrill%20lynch.pdf
READ THE CASE FILED AND CA– USES OF ACTIONS! FRAUD IS ONLY ONE OF THE CHARGES.WILL SOMEONE PLEASE TELL ME, A CONTRACT THAT BEGINS AS FRAUD, WHEN DOES IT CHANGE INTO ANYTHING ELSE? WHY ARE “FRAUD CONTRACTS” BEING — USED TO FORECLOSE AND EVICT THE VICTIMS OF THE FRAUD? ALL FRAUD CONTRACTS SHOULD BE NULL AND VOIDED, IF THE “LAW” APPLIES TO ALL…PERHAPS THE LAW DOES NOT APPLY TO SOME-CHASE,CITI,BOA,GOLDMAN,MERRILL,WELLS, 17 ONLY NOT ALL OF THE LENDERS, JUST THE 17 CHOSEN ONES!
[What’s really going on here? The banks are frightened about their legal exposure. A loss at trial would lead to a multi-billion-dollar payout to FHFA.]
but they did , please enlighten me, what are they trying to do.