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Friday, September 02, 2011

US Government Agency to Sue Big Banks?

This should really help job creation. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is expected to sue more than a dozen big banks today over the quality of their mortgages.

It probably doesn't need repeating, but first the government forces banks to lend money to people who have very questionable credit, then when those people default, they decide to sue those same banks and accept no blame for the two institutions (Freddie and Fannie) that were responsible for guaranteeing these mortgages. That makes sense but only in a Barney Frank world...

Meanwhile, the Fed has asked BofA for contingency plans in case the economy turns for the worst. Hmm...not a bad way to force BofA into a large settlement (ie. to extort billions from the bank).