Authorities in New York and Connecticut are investigating whether Wall Street banks hid crucial information about high-risk home mortgage loans bundled into securities that were sold to investors, Connecticut's Attorney General said on Saturday.
The investigations, first reported on Saturday by the New York Times, center around "no-doc" or "exception" loans, that did not even meet even subprime standards, Attorney General Richard Blumenthal said.
"The loans were made to people who did not have any documents to verify their income or other verification for key requirements normally applied to mortgage borrowers," he said.
"Many of the lenders made large amounts of loans, so that the exception swallowed the rule, or became the rule," Blumenthal said.
The loans were sold by subprime lenders to Wall Street firms that bundled them with other, less risky, loans into securities.
Investigators want to find out whether the banks properly disclosed the high risk of default on those loans when selling those securities to investors in Connecticut and elsewhere, Blumenthal said.
"The investment banks may have used very broad, boilerplate disclaimer language that effectively failed to disclose fully and fairly all the information," he said.
Blumenthal said Connecticut is cooperating with New York and that the investigation may eventually include the US Securities and Exchange Commission.
The Times said charges could be filed in the coming weeks.
Jeffrey Lerner, a spokesman for New York Attorney General Andrew Cuomo, declined to comment on Saturday.
In November, Cuomo said he issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry. He said he wanted to know about billions of dollars of home loans they bought from banks, including the largest US savings and loan, Washington Mutual Inc, and how appraisals were handled.
Spokesmen for both lenders said they require accurate appraisals and both agreed to appoint independent examiners as requested. Washington Mutual said it was conducting its own internal investigation into Cuomo's claims and that "the company will vigorously defend itself from all unfounded allegations and lawsuits."
Blumenthal declined to say which firms were under investigation, but said his office had issued more than 30 subpoenas.
"These practices involving trillions of dollars in securities sold to ordinary investors go to the core of our financial system's integrity and efficiency," Blumenthal said. "We regard this investigation as a priority."
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
US-CHINA SUMMIT: MOFA welcomed US reassurance of no change in its Taiwan policy; Trump said he did not comment when Xi talked of opposing independence US President Donald Trump yesterday said he has not made a decision on whether to move forward with a major arms package for Taiwan after hearing concerns about it from Chinese President Xi Jinping (習近平). Trump’s comments on Taiwan came as he flew back to Washington after wrapping up critical talks in which both leaders said important progress was made in stabilizing US-China relations even as deep differences persist between the world’s two biggest powers on Iran and Taiwan. “I will make a determination,” Trump said, adding: “I’ll be making decisions. But, you know, I think the last thing we need right
TAIWAN ISSUE: US treasury secretary Scott Bessent said on the first day of meetings that ‘it wouldn’t be a US-China summit without the Taiwan issue coming up’ There were no surprises on the first day of the summit between US President Donald Trump and Chinese President Xi Jinping (習近平), the Mainland Affairs Council (MAC) said yesterday, as the government reiterated that cross-strait stability is crucial to the Asia-Pacific region, as well as the world. As the two presidents met for a highly anticipated summit yesterday, Chinese state media reported that Xi warned Trump that missteps regarding Taiwan could push their two countries into “conflict.” Trump arrived in China with accolades for his host, calling Xi a “great leader” and “friend,” and extending an invitation to visit the White House
SECURITY: Taipei presses the US for arms supplies, saying the arms sales are not only a reflection of the US security commitment to Taiwan but also serve as a mutual deterrent against regional threats Taiwan is committed to preserving the cross-strait “status quo” and contributing to regional peace and stability, the Presidential Office said yesterday. “It is an undeniable fact that the Republic of China is a sovereign and independent democratic nation,” Presidential Office spokeswoman Karen Kuo (郭雅慧) reiterated, adding that Beijing has no right to claim sovereignty over Taiwan. The statements came after US President Donald Trump warned against Taiwanese independence. Trump wrapped up a state visit to Beijing on Friday, during which Chinese President Xi Jinping (習近平) had pressed him not to support Taiwan. Taiwan depends heavily on US security backing to deter China from carrying
RSS