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BUSINESS
October 2, 2012 | By Jim Puzzanghera
WASHINGTON -- Promises made to investors by Bear Stearns & Co. about the quality of mortgage-backed securities during the subprime housing boom were "a sham," New York Atty. Gen. Eric Schneiderman said Tuesday in detailing the first suit by a task force investigating misconduct by banks in the run-up to the financial crisis. The securities fraud suit "goes to the heart of the misconduct that created the housing bubble and caused the crash of 2008," Schneiderman told reporters a day after filing a securities fraud suit related to the sale of mortgage bonds by Bear Stearns & Co., which was later acquired by JPMorgan Chase & Co. The suit against JPMorgan alleged that Bear Stearns misled investors that the bank had carefully evaluated the quality of mortgages it packaged into securities from 2005-2007 and that it had monitored the originators of those loans to make sure they were following guidelines designed to ensure that borrowers could repay the loans.
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BUSINESS
March 11, 2014 | By Jim Puzzanghera
WASHINGTON - Congressional efforts to shut down bailed-out Fannie Mae and Freddie Mac took a significant step forward with bipartisan agreement from key senators on a plan to overhaul the housing finance system. The proposal released Tuesday would slowly shrink the companies and replace them with a scaled-back government guarantee for mortgages. Details are expected to be disclosed in the coming days. Fannie Mae and Freddie Mac, which together own or guarantee about 60% of existing mortgages, were seized by the federal government in 2008 as they neared bankruptcy from bad loans they guaranteed during the subprime housing boom.
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BUSINESS
August 10, 2012 | By Jim Puzzanghera
WASHINGTON - The Justice Department said it would not pursue criminal charges against Goldman Sachs Group Inc. or its employees related to allegations by a Senate panel that the bank deceived investors and Congress about its activities in the subprime mortgage market. After an “exhaustive review” that began last year, investigators “concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the Justice Department said in a statement released Thursday night.  The officials said they could change their minds “if any additional or new evidence emerges.” The investigation by officials from the Justice Department's Criminal Division, the U.S. attorney's office for the southern district of New York, the FBI and other agencies began after a scathing report regarding Goldman was issued in April 2011 by the Senate's Permanent Subcommittee on Investigations.
BUSINESS
October 19, 2013 | By Michael Hiltzik
Yes, $13 billion in penalties --the figure at the center of the JPMorgan mortgage settlement deal being reported Saturday--is eye opening. Yes, it's a record in a civil proceeding against a major corporation. But the most significant thing about JPMorgan's deal with the Department of Justice may be what it doesn't do. It doesn't resolve the ongoing federal criminal investigations of the bank's conduct in the residential mortgage securities business during the run-up to the 2008 financial crisis.
BUSINESS
July 31, 1985
The buyer was Salomon Bros., the New York investment banking firm. The sale price was not disclosed, but the amount was termed "modest" by William J. Popejoy, chairman of Irvine-based Financial Corp. of America. FCA Mortgage Securities was started by former Chairman Charles W. Knapp, but it never got off the ground because of FCA's troubles last year. The subsidiary was supposed to buy loans from mortgage bankers, pool them together and sell them to investors for a fee.
BUSINESS
April 17, 1986
The Federal National Mortgage Assn. announced that it will start issuing securities backed by new government-insured mortgages, a move intended to bridge the gap caused by the temporary suspension of these guarantees by the Government National Mortgage Assn. Last week, Ginnie Mae temporarily stopped making the guarantees, which affected new loans from the Federal Housing Administration and the Veterans Administration.
BUSINESS
May 7, 1995 | RUSS WILES, RUSS WILES is a financial writer for the Arizona Republic, specializing in mutual funds
Mutual funds that invest in mortgage-backed securities are enjoying a fine rebound this year after a dismal 1994, shoring up confidence in these popular, if complex, investments. Mortgage fund shareholders who held on through last year's tough climate earned a 5.7% average return over the first four months of 1995, nearly a point better than taxable bond funds generally, reports Morningstar Inc. of Chicago.
BUSINESS
February 26, 1988 | From Reuters
After years of domination by two giant Wall Street investment banking firms, the $700-billion U.S. mortgage-backed securities market is witnessing a significant redistribution of market share, industry sources say. Salomon Bros. and First Boston Inc., which three years ago collectively handled 60% of the mortgage business, now are responsible for just 30% of the $4 billion to $5 billion worth of mortgage securities traded each day.
BUSINESS
December 21, 2007 | From Times Wire Services
The country's largest bond insurer shocked financial markets Thursday with a disclosure about its exposure to risky mortgage-related securities, sending its shares plunging and calling into question the safety of tens of billions of dollars of corporate and local government debt held by investors. MBIA Inc. said that of the $30 billion in complex mortgage securities it insured, about $8 billion was of the type viewed as most risky.
BUSINESS
February 4, 2013 | By Alejandro Lazo and Andrew Tangel, Los Angeles Times
The federal government is embarking on one of its most ambitious efforts to assign blame for the financial crisis, going after Wall Street's biggest credit rating firm for its role in pumping up the housing bubble. The Justice Department filed a lawsuit late Monday in Los Angeles federal court against Standard & Poor's Corp. The suit accuses the company's analysts of issuing glowing reviews on troubled mortgage securities whose subsequent failure helped cause the worst financial crisis since the Great Depression.
BUSINESS
September 6, 2013 | Michael Hiltzik
Everybody wants to see the perpetrators of the financial crisis punished, but you have to feel a little sorry for Standard & Poor's, the credit rating firm being sued by the federal government for its role in the disaster. S&P clearly has its back to the wall in this case. We can conclude this from the desperate defense it raised in court last week: that federal prosecutors have their knives out for S&P in "retaliation" for its downgrade of the U.S. government's credit rating in August 2011.
BUSINESS
August 30, 2013 | By E. Scott Reckard
In a new legal challenge, financial industry opponents of the city of Richmond's plan to seize underwater home loans call the gambit a disguised attempt to profit at the expense of everyday investors. Richmond is threatening to use eminent domain to remove troubled loans from mortgage bonds in order to write down the principal for homeowners. The novel plan, promoted by San Francisco investment firm Mortgage Resolution Partners, seeks to stop another wave of foreclosures in the working-class Northern California city.
BUSINESS
August 16, 2013 | By Kenneth R. Harney
WASHINGTON - You may have seen two sets of news reports recently that didn't quite add up: First, President Obama called for the liquidation of Fannie Mae and Freddie Mac, the country's largest providers of funds for home mortgages. Then, Fannie Mae announced its sixth straight quarterly profit and said it was sending $10.2 billion in dividends to the Treasury. Freddie Mac also reported a hefty profit - $5 billion over the previous three months - and said it is providing $4.4 billion in dividends to the government.
BUSINESS
August 15, 2013 | By E. Scott Reckard
The city of Richmond recently asked financial institutions to sell 624 troubled mortgages - and threatened to seize them through eminent domain. Now the city has its answer: We can't help you. The city aims to provide its residents mortgage relief by buying the loans at a deep discount, then getting them refinanced at amounts lower than the current value of the home. But the loans aren't for sale, according to banks that provide customer service on the loans and watch over the trusts where the loans were pooled to back mortgage bonds.
BUSINESS
August 8, 2013 | By Alejandro Lazo
The nation's top housing finance regulator threatened to choke off mortgage lending in cities that use eminent domain to seize underwater loans from lenders. The salvo from the Federal Housing Finance Agency came Thursday, on the heels of a lawsuit directed by major Wall Street firms and U.S.-sponsored mortgage giants Fannie Mae and Freddie Mac against the Bay Area city of Richmond. Richmond is the first to push forward with the plan, also being debated in cities across the state and nation.
BUSINESS
August 7, 2013 | By E. Scott Reckard
JPMorgan Chase & Co. disclosed that it may become the latest giant bank to face a Justice Department lawsuit over bonds backed by housing-boom loans, and said a parallel criminal investigation is continuing.  Federal prosecutors believe that JPMorgan Chase, the nation's largest bank, violated securities law in its sale of bonds backed by subprime and other high-risk mortgages, the bank said Wednesday in a Securities and Exchange Commission filing....
BUSINESS
August 31, 2011 | By E. Scott Reckard, Los Angeles Times
Bank of America Corp.'s proposed $8.5-billion settlement with 22 major holders of Countrywide Financial Corp. mortgage securities came under fire in New York federal court as a deadline to challenge the deal arrived. The flurry of objections Monday and Tuesday included a lawsuit by homeowners whose loans had been pooled to back the mortgage bonds. Filings objecting to the deal also were lodged by the Federal Deposit Insurance Corp., which represents failed banks that lost money on the securities, and the Federal Housing Finance Agency, which regulates the government-controlled mortgage giants Freddie Mac and Fannie Mae. The FDIC and the FHFA described their objections as place holders.
BUSINESS
July 19, 2011 | By E. Scott Reckard, Los Angeles Times
Federal regulators are seeking $629 million in damages from a Royal Bank of Scotland unit accused of selling riskier-than-advertised mortgage securities to Western Corporate Federal Credit Union, a San Dimas credit union that failed during the financial crisis. The National Credit Union Administration lawsuit was filed Monday in U.S. District Court in Los Angeles. It alleged that RBS Securities knew or should have known that the loans backing its bonds contained "systematic" misrepresentations about the borrowers' incomes, debt levels, equity in properties and intent to live in the homes that were mortgaged.
BUSINESS
August 6, 2013 | By E. Scott Reckard
In twin securities-fraud lawsuits against Bank of America Corp., the federal government is accusing the nation's second-largest lender of lying to investors about supposedly prime loans that more closely resembled subprime "liar loans. " The civil suits, filed Tuesday by the Justice Department and Securities and Exchange Commission, focus on $850 million in mortgage-backed securities that BofA issued in 2008. The mortgage bonds included so-called Paper Saver loans that required little documentation of a borrower's income or ability to pay. The suits are the latest in a long string of government and private mortgage-related civil actions targeting banks.
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