Categorized | Finance and Mortgage

Government Lawsuits Against Major Banks May Fall Flat

Please Share!

The various lawsuits filed on behalf of the United States government against seventeen major banks may not be nearly as successful as originally hoped. The lawsuits were filed with the intentions of holding the major banks accountable for the real estate crash, and the deep recession that has crippled the nation over the past few years.

The allegations behind the lawsuit include the premise that Fannie Mae and Freddie Mac were not provided accurate information regarding two hundred billion dollars worth of mortgages, and it was these mortgages that drove both companies to bankruptcy.

It may seem as if the United States government has a strong case against the banks, and the general public has generally been in favor of punishing the lending institutions for their role in destroying the economy. However, the reality is that the banks may escape the lawsuits relatively unscathed.

Legal experts and analysts believe that the banks will be able to argue that Fannie Mae and Freddie Mac had enough experience with subprime loans to be able to recognize any faults in the two hundred billion dollars worth of mortgages that they purchased from major lenders. They believe that the two organizations should have been able to recognize any potential misleading data with respect to the purchased mortgages.

The United States government, however, is standing behind the lawsuits, and claims that the banks should never have offered to sell mortgages behind faulty and misleading data, regardless of whom the intended buy would be.

The lawsuit is expected to last a few years, and is easily one of the most powerful actions taken by the government with respect to looking for justice against those who contributed to damaging the United States economy.

Please Share!

About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

Leave a Reply

Twitter Chat