loan_pools_need_some_sun_NYT_morgenson_mar21-2010

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FAIR GAME Money and Business/Financial Desk; SECTBU Pools That Need Some Sun By GRETCHEN MORGENSON 1053 words 21 March 2010 The New York Times NYTF Late Edition - Final 1 English Copyright 2010 The New York Times Company. All Rights Reserved. LAST week, the Federal Home Loan Bank of San Francisco sued a throng of Wall Street companies that sold the agency $5.4 billion in residential mortgage-backed securities during the height of the mortgage melee. The suit, filed March 15 in state court in California, seeks the return of the $5.4 billion as well as broader financial damages. The case also provides interesting details on what the Federal Home Loan Bank said were misrepresentations made by those companies about the loans underlying the securities it bought. It is not surprising, given the complexity of the instruments at the heart of this credit crisis, that it will require court battles for us to learn how so many of these loans could have gone so bad. The recent examiner's report on the Lehman Brothers failure is a fine example of the in-depth investigation required to get to the bottom of this debacle. The defendants in the Federal Home Loan Bank case were among the biggest sellers of mortgage-backed securities back in the day; among those named are Deutsche Bank; Bear Stearns; Countrywide Securities, a division of Countrywide Financial; Credit Suisse Securities; and Merrill Lynch. The securities at the heart of the lawsuit were sold from mid-2004 into 2008 -- a period that certainly encompasses those giddy, anything-goes years in the home loan business. None of the banks would comment on the litigation.
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This note was uploaded on 02/22/2012 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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loan_pools_need_some_sun_NYT_morgenson_mar21-2010 - Factiva...

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