Feds to sue big banks

Next Wednesday it will be three years since the collapse of Lehman Brothers. Because that same three years might represent the statute of limitations on some claims for fraud or deception in the real estate financing industry back then, the United States government, on behalf of Fannie Mae and Freddie Mac, is expected to file suit today or Tuesday against several major banks including Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank. The allegation is that these banks misrepresented the quality of mortgages that were packaged up into bonds and sold to investors. It's hard to believe that there's finally some action on these matters. To me, the biggest obstacle to the claim would be contributory negligence by the plaintiffs since I believe that almost everyone had hands in the cookie jar. Amazingly there are those who now say that notwithstanding any wrongdoing done by the banks several years ago, to hit them with mega-judgments now would be bad for the economy. That's a bit like saying that someone who robbed a bank years ago should not go to jail now because there would be no one to support his family. Whatever the outcome of this litigation, I hope the discovery process discloses much that until now has been undisclosed about the actions and thought-processes of major US lenders during the run-up of housing prices in the middle of the last decade. An accurate history of what really happens still needs to be written.