http://market-ticker.denninger.net/archives/1913-This-Is-What-SHOULD-Be-Happening-FHLB-Suit.html
Good luck Seattle, heres hoping justice serves you well.
This is exactly what I have advocated for the last two years:
Morgan Stanley, UBS and Barclays were among banks sued by Federal Home Loan Bank of Seattle, which seeks to recoup more than $2 billion it paid for certificates backed by faulty mortgages.
The banks made misleading statements about the asset-backed securities and the credit quality of the mortgage loans that backed them when they sold them to Federal Home Loan, according to six complaints filed in state court in Seattle last month and transferred to federal court starting Jan. 22.
The banks also made misleading or "untrue" statements about underwriting guidelines of mortgage-loan originators who were "failing frequently, and increasingly frequently, to follow quality-assurance practices intended to detect and prevent fraud," according to the complaints.
Gee, you mean that the banks said the credit quality of buyers was "X" but never verified any of it, performed no quality control, and in fact that was a lie?
No, really? You mean starting in 2004 the FBI said this?
"It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis", he said.
In fact it was worse than the S&L crisis eh?
