CNN Breaking News: Government goes after financial firms over mortgage losses

By Tami Luhby @CNNMoney September 2, 2011: 5:20 PM ET

The federal agency overseeing Fannie Mae and Freddie Mac filed lawsuits against 17 financial institutions in an attempt to recover losses from risky mortgage investments.


The lawsuits were filed against many of the nation's largest Wall Street and financial firms, including Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase.


In the complaints, the Federal Housing Finance Agency contends the institutions misrepresented the quality of the investments' underlying loans.


"Based on our review, FHFA alleges that the loans had different and more risky characteristics than the descriptions contained in the marketing and sales materials provided to the enterprises for those securities," the agency said in a press release.

Fannie Mae and Freddie Mac, which were taken into conservatorship by the federal government during the 2008 financial crisis, are the largest sources of funding for the U.S. housing market.


Excerpt:  Read More at CNN

Note:  There go donations to the Obama campaign with these banks being sued by the Federal Government.  In Bank of America's case the Federal Government encouraged (demanded) they buy Countrywide where a lot of the problems are coming on mortgages for the Bank of America.