HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform

Visit HOBB Forums

Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member

Enter Amount:
$

Who's Online
We have 1 guest online
Feds Take First Steps to Hold Bank Exectuives Accountable
Saturday, 10 September 2011

Editorial: Bold move to hold banks accountable
Just as Americans kicked off the long Labor Day weekend, a little-known federal agency took a bold step to hold the banking industry -- including individual executives -- accountable for the mortgage meltdown still plaguing the nation's ailing economy. The lawsuit against JP Morgan, for example, names 38 individual defendants. Twelve execs are named in the Bank of America suit, while seven merit a mention in the Morgan Stanley filing. The lawsuits allege that these individuals, most of whom are not well-known but still work in this highly paid industry, signed off or were responsible for providing misleading information... FHFA's gutsy move won't help homeowners with underwater mortgages who are still being jerked around by the banking industry. Nor does it hold accountable the Fannie and Freddie executives whose ruinous leadership -- including Minnesota native and Democratic political operative James Johnson -- led to a massive taxpayer bailout.

Star Tribune
Editorial: Bold move to hold banks accountable

Just as Americans kicked off the long Labor Day weekend, a little-known federal agency took a bold step to hold the banking industry -- including individual executives -- accountable for the mortgage meltdown still plaguing the nation's ailing economy.

On Sept. 2, the Federal Housing Finance Agency (FHFA) filed lawsuits against 17 of the nation's most influential banks -- including Goldman Sachs, Bank of America and Morgan Stanley. FHFA, which is the conservator for Fannie Mae and Freddie Mac, seeks to recover losses the two giant, taxpayer-backed housing enterprises sustained on nearly $200 billion of soured mortgage securities.

The agency alleges that the big banks misrepresented or omitted key information about the bundled mortgages' quality -- for example, stated underwriting standards were not followed -- that Fannie and Freddie bought as investments. The agency took similar action in July against another banking giant, UBS.

Three years after the mortgage meltdown tanked the global economy, these aggressive and well-documented lawsuits comprise one of the most ambitious efforts to date to hold the industry accountable and scrutinize in greater detail what went wrong -- something that is still sorely needed.

FHFA's effort is a milestone, but the lawsuits' filing before the holiday meant it hasn't received the attention it deserves.

This is groundbreaking litigation not only in scope but because it names individual banking executives, something previous federal probes have generally been reluctant to do. Reuters writer Jonathan Stempel pointed out that detail in a smart analysis that shouldn't only be a business-insider read.

The lawsuit against JP Morgan, for example, names 38 individual defendants. Twelve execs are named in the Bank of America suit, while seven merit a mention in the Morgan Stanley filing.

The lawsuits allege that these individuals, most of whom are not well-known but still work in this highly paid industry, signed off or were responsible for providing misleading information.

FHFA's gutsy move won't help homeowners with underwater mortgages who are still being jerked around by the banking industry. Nor does it hold accountable the Fannie and Freddie executives whose ruinous leadership -- including Minnesota native and Democratic political operative James Johnson -- led to a massive taxpayer bailout.

New York Times reporter Gretchen Morgenson's recent book, "Reckless Endangerment,'' offers a damning account of Johnson's time at Fannie Mae.

Still, it's long past time for a federal agency to publicly get at who knew what and when. While its actions are civil, not criminal, naming names is a potent deterrent against future misconduct. The lawsuits could also drum up evidence for other probes.

Some banks and industry insiders warn that FHFA's action will imperil the financial industry and, therefore, the broader economy.

By that logic, everybody who had their hands in the mortgage mess should get a pass. That may fly on Wall Street, but we Main Streeters see right through this self-interested response.

FHFA rightly points out that the "long-term stability and resilience of the nation's financial system depends on investors being able to trust that securities sold in this country adhere to applicable laws.''

Those who broke that trust should be held accountable. The FHFA lawsuits are a timely effort to make that happen.
http://www.startribune.com/opinion/editorials/129558688.html

 
< Prev   Next >
Search HOBB.org

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Consumer Affairs Builder Complaints

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
conttribute@hobb.org
 or call 1-210-402-6800

top of page

© 2014 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.