U.S. Regulator Sues 17 Banks For Mortgage Fraud (more details)

The federal government late Friday filed lawsuits against 17 financial institutions, including some of the nation’s largest banks, alleging a pattern of fraud in their packaging and selling of roughly $200 billion worth of mortgage-linked securities. The suits amount to one of the most significant legal actions to emerge from the rubble of the financial crisis nearly three years ago.

The lawsuits put intense pressure on the Obama administration, which has long insisted that U.S. banks are healthy, while pushing for a cheap and speedy settlement over separate allegations that banks committed widespread fraud in the foreclosure process.

The suits include at least one explicitly political problem for Obama. The FHFA's targets include General Electric, an international beacon of American business whose CEO, Jeffrey Immelt, currently serves as a top economic adviser to Obama.

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