NEWS FLASH

Banks Throw Tantrum Over Federal Lawsuit, Walk Out Of Foreclosure Fraud Settlement Talks | Last week, the Federal Housing Finance Agency sued 17 major banks, alleging that the banks committed fraud by misleading investors (including Fannie Mae and Freddie Mac) during the buildup of the housing bubble. As CAP Senior Fellow Peter Swire noted yesterday, bankers have responded by whining that they shouldn’t have to pay for even provable fraud. And that’s not the only temper tantrum that the banks have thrown. As Time’s Massimo Calabresi reported, the nation’s five biggest mortgage servicers also “cancelled a planned negotiating session with representatives of the 50 State Attorneys General in apparent protest over a federal regulator filing suit against them.” The 50 AG’s have been negotiating with the banks over a settlement stemming from the foreclosure fraud scandal that broke several months ago. (Via Naked Capitalism)