Fannie and Freddie are suing BAC for $6B. But they are also suing subsidiaries Countrywide and MER for $25B each. The total comes to $56B in lawsuits against BAC and subsidiaries that I don't think have much merit. The disclosures and risk factors were all shown and over 90% of the Mortgage-Backed Securites at the time carried AAA ratings from S & P and Fitch.
Those ratings are as plain as day and if Fannie and Freddie over-relied on the despite all of the warnings and risk factors in the prospectuses, they should be suing the ratings agencies - not the banks.
Donald Trump almost went bankrupt in the late '80's after buying Manhattan properties during boom times and paying top dollar. I never saw him try and recover anything from the sellers; he invested at the peak of the boom and suffered greatly when the real estate market fell apart a few years later.
So they want money from Merill Lynch also?? I did know that Merill had mortgage problems also... But you are right about the risks.. Fannie knew the risks and it souncs like they wanted to make a bunch just like Lewis wanted to make a bunch off Countrywide... Big mistake in both BAC and Fannie and Freddie in their thinking of making a bundle...
Thamks for your information. I really appreciate it..