Mortgage-backed Securities | featured news

With the Federal Reserve buying billions of dollars worth of mortgage-backed securities, you might think that mortgage rates are poised to fall even lower than the current rock-bottom levels. Maybe you should wait on that refinancing, you wonder, or delay purchasing a house until the market is even more favorable.

Morgan Stanley said a group of investors believes the bank may have sold defective mortgage bonds contained in more than $6 billion of trusts, signaling that it may face litigation over its involvement.

California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says. Investigators with the state attorney general's office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.

A bellwether index of subprime mortgage bonds rallied, a day after the New York Fed suspended further auctions of so-called Maiden Lane II securities acquired in the AIG bailout.

Taylor, Bean and Whitaker Mortgage Corp's former chairman, convicted of masterminding a $2.9 billion fraud scheme before the company collapsed, was sentenced on Thursday to 30 years in prison.

Bank of America Corp is close to a deal to pay $8.5 billion to settle claims from investors that lost money on mortgage-backed securities, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Goldman Sachs Group Inc could release documents to counter a Senate subcommittee report that said the bank misled clients about mortgage-linked securities, the Wall Street Journal reported, citing people familiar with the matter.

Two lawmakers are set to unveil legislation to replace Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees.

Ratings firms won another victory against legal claims that they should be held responsible for billions of dollars in losses suffered by investors during the financial crisis. A three-judge panel of the U.S. Court of Appeals for the Second Circuit ruled that Moody's Corp., Standard & Poor's, and Fitch Ratings can't be held liable for their ratings of mortgage-backed securities.

The government panel, the Financial Crisis Inquiry Commission blames: Banks that made reckless bets, credit rating agencies that endorse risky mortgage-backed securities and government regulators who overlooked warning signs until they threatened the global financial system.