Fannie Mae and Freddie Mac have officially filed lawsuits against 17 of the largest banks "over soured mortgage bonds, aiming to recoup billions of dollars in losses from the failed investments," reports The Wall Street Journal. Filing against at least 12 banks was anticipated, as we reported earlier this morning. From the Journal:
The inquiry has focused on the "private label" securities based on subprime and other risky loans that were originated by mortgage companies, packaged by Wall Street firms, and then sold to investors.
The suits come as the potential statute of limitations for the FHFA to take such actions draws near next week, according to people familiar with the matter. The FHFA placed Fannie and Freddie into conservatorship, a legal process similar to bankruptcy restructuring, three years ago on next Wednesday.
The Federal Housing and Finance Comittee, which oversees Fannie Mae and Freddie Mac, is suing Bank of America, Citigroup, J.P. Morgan Chase & Co., Goldman Sachs, Deutsche Bank, General Electric Co. and others. The FHFS lost $30 billion when the housing bubble burst in 2008, which taxpayers covered in the bailout.