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Friday
Sep022011

Report: US to Sue More Than a Dozen Big Banks over Mortgage Securities

US Government(NEW YORK) -- The Federal Housing Finance Agency, which overseas mortgage firms Freddie Mac and Fannie Mae, is reportedly planning to file lawsuits against more than a dozen big banks, claiming they misrepresented the quality of mortgage securities they built and sold to investors before the housing market collapsed.

Citing three people familiar with the matter, The New York Times reports Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank will be among the banks targeted.

In the lawsuit, the agency will contend that these banks didn't meet the due diligence required under securities law and that they failed to notice evidence that borrowers' incomes were inflated or falsified, according to the Times.

The newspaper says the case could be filed by Friday, if not, then by Tuesday.

Copyright 2011 ABC News Radio

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