Housing Crisis: US sues 17 big banks

A US regulator sued more than a dozen major banks over losses on nearly $200 billion of subprime bonds.

WASHINGTON/NEW YORK: A US regulator sued more than a dozen major banks on Friday over losses on nearly $200 billion of subprime bonds, which may hamper a broader government settlement of the mortgage mess left over from the housing crisis. The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed down bank shares. The lawsuits could add billions of dollars to the banks’ potential costs at perhaps the worst possible time for the industry. The litigation reflects how different parties, including investors, banks and different government groups are fighting over who should bear the losses from the housing crisis that tripped the economy into the worst recession in decades in 2008.

Published in The Express Tribune, September 4^th, 2011.