By David DeGraw
Finally, after trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. As the Eurozone is coming apart at the seams and as the US economy grinds to a halt, the financial elite are starting to turn on each other. The lawsuits are piling up fast. Here’s an extensive roundup:
As I reported last week:
Collapse Roundup #5: Goliath On The Ropes, Big Banks Getting Hit Hard, It’s A “Bloodbath” As Wall Street’s Crimes Blow Up In Their Face
Time to put your Big Bank shorts on! Get ready for a run… The chickens are coming home to roost… The Global Banking Cartel’s crimes are being exposed left & right… Prepare for Shock & Awe…
Well, well… here’s your Shock & Awe:
First up, this shockingly huge $196 billion lawsuit just filed against 17 major banks on behalf of Fannie Mae and Freddie Mac. Bank of America is severely exposed in this lawsuit. As the parent company of Countrywide and Merrill Lynch they are on the hook for $57.4 billion. JP Morgan is next in the line of fire with $33 billion. And many death spiraling European banks are facing billions in losses as well.
FHA Files a $196 Billion Lawsuit Against 17 Banks
The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac (the Enterprises), today filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters. The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the Enterprises.
Complaints have been filed against the following lead defendants, in alphabetical order:
1. Ally Financial Inc. f/k/a GMAC, LLC – $6 billion
2. Bank of America Corporation – $6 billion
3. Barclays Bank PLC – $4.9 billion
4. Citigroup, Inc. – $3.5 billion
5. Countrywide Financial Corporation -$26.6 billion
6. Credit Suisse Holdings (USA), Inc. – $14.1 billion
7. Deutsche Bank AG – $14.2 billion
8. First Horizon National Corporation – $883 million
9. General Electric Company – $549 million
10. Goldman Sachs & Co. – $11.1 billion
11. HSBC North America Holdings, Inc. – $6.2 billion
12. JPMorgan Chase & Co. – $33 billion
13. Merrill Lynch & Co. / First Franklin Financial Corp. – $24.8 billion
14. Morgan Stanley – $10.6 billion
15. Nomura Holding America Inc. – $2 billion
16. The Royal Bank of Scotland Group PLC – $30.4 billion
17. Société Générale – $1.3 billion
These complaints were filed in federal or state court in New York or the federal court in Connecticut. The complaints seek damages and civil penalties under the Securities Act of 1933, similar in content to the complaint FHFA filed against UBS Americas, Inc. on July 27, 2011. In addition, each complaint seeks compensatory damages for negligent misrepresentation. Certain complaints also allege state securities law violations or common law fraud. [read full FHFA release]
You can read the suits filed against each individual bank here. For some more information read Bloomberg: BofA, JPMorgan Among 17 Banks Sued by U.S. for $196 Billion. Noticeably absent from the list of companies being sued is Wells Fargo.
And the suits just keep coming… Stay tuned for Part II on DEADLY CLEAR.
By DEADLY CLEAR
Other than calling $196 Billion dollars “shockingly huge” this is an excellent report and worth digesting preferably before eating – especially if you want to lose weight. Although $196 Billion sounds “huge”, in the scheme of things it is nowhere near enough and it becomes all the more apparent when you do the math that the unthinkable intention of the government may not be to benefit the American public – but to protect the elites and the banks. Let me tell you why in a nutshell and I will elaborate in a later post.
There were millions of loans made over the last decade with these same abuses – to which Fannie and Freddie were clearly parties with inside knowledge – knew or should have know exactly what existed in the Trusts. God help them if this goes to trial and I am on a jury (not likely because I blog) because I’d have to point out that the investors (just like anybody else) had a fiduciary duty to inspect what they were purchasing – buyer beware.
It appears that Fannie and Freddie would have unclean hands and let’s target just one area of the corruption: MERS, where Fannie and Freddie were at the helm. MERS had only 49 employees and took responsibility for over 67 million mortgages in about a 5-year period. Anybody with a lick of business sense would know that even if all the employees (secretaries, receptionists, computer technicians, cleaning personnel included) were actively servicing the mortgages each one would have to handle 22,789 mortgages a month – which is utterly impossible. Thus, there were casts of thousands called robo-signers = FRAUD.
Now if Fannie and Freddie were unaware of this – well, fire them today and shut them down. But, wait there’s more…
Fannie and Freddie knew (or should have known) that the goal of MERS was to evade the state recording fees and basically hide the mortgages from the regulators which allowed the bank to write more loans than they could legally hold. It appears Fannie and Freddie were complicit in this scheme.
In most cases it is MERS who makes the late assignments to the Trusts – meaning that MERS failed to timely deliver the documents in the first place and caused the Trusts’ to have to be liquidated and was at the core of the “empty” Trust issues where many of the investor lawsuits stem.
As a board member or corporate officer there is oversight and responsibility expected – so tell me how do Fannie and Freddie expect to maintain that they knew nothing about the shenanigans of their beloved MERS?
With that said – lets just take MERS mortgages alone: 67 million. These folks (whether in foreclosure or not) have been damaged. The banks that participated in the ruse caused the collapse of the world wide economy – that is a fact. Property values have severely plummeted, equity totally lost, investments, college funds, pension and retirement funds – all gone. No college education unless you can get a school loan (which is known as an Auction Rated Security (ARS) - yeah, more of the same game that took us down to begin with). No chance of selling the home – the titles are clouded and there are no loans. So, 67 million people (and their families) are damaged.
In homeowner lawsuits there are usually 6-8 good claims in a Complaint. Most have triple or punitive damages attached. And the more astute the judges become in recognizing the bank fraud and the Ponzi scheme (and the less they play golf or cards with the banks) – the better the law is coming out of the courts.
Let’s just say that each claim has about $100,000 attached. Maybe that is the amount the real estate is underwater and these 67 million folks all get to a jury trial and the basis for the award of damages is triple X8. That is $2.4 million per household. If you multiple that figure times 67 million it is over $160 TRILLION in damages.
And let’s just say that only one claim is left standing for $100,000 and it is for a Triple damage claim – that would equal $20 TRILLION in damages and THAT is a “SHOCKINGLY HUGE” but a more realistic picture of the damage that these banksters have caused.
If the FHA wants to go after somebody – they need to include Fannie and Freddie and not be suing on behalf of them. I suspect that Mr. Bernanke, Mr. Geithner and Mr. Paulson would have some part to play in the scheme of things here too…. not to mention Mr. Greenspan.
In any case, I suspect there will be a lot of intervenors in these cases and certainly if you have been sued for foreclosure by one of these Trusts, contact a good foreclosure defense attorney and call your attorney general.