Subprime Mortgage | featured news

Standard & Poor's Corp. helped cause the financial crisis by misleading investors with falsely high credit ratings on bonds backed by toxic subprime mortgages, federal officials alleged Tuesday in announcing a civil suit against the company.

Citigroup said on Wednesday that it had agreed to pay $590 million to settle a class action lawsuit brought by shareholders who contended that they had been misled about the bank’s exposure to subprime mortgage debt on the eve of the financial crisis.

The U.S. Justice Department said it will not pursue criminal charges against Goldman Sachs Group Inc or its employees related to accusations that the firm bet against the same subprime mortgage securities it was selling to clients.

The Securities and Exchange Commission has brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled the government and taxpayers about risky subprime mortgages the mortgage giants held during the housing bust....

Wells Fargo & Co and the Department of Justice are negotiating to settle allegations that the bank illegally targeted African-Americans for expensive subprime loans, according to a source familiar with the matter.

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.

Goldman Sachs Group Inc agreed to pay $550 million to settle civil fraud charges over how it marketed a subprime mortgage product, ending months of negotiations that rattled the bank's clients and investors.

Wells Fargo said it will shut down a unit that makes "non-prime" real estate, auto and credit card loans and stop originating nonprime mortgages, eliminating a total of 3,800 jobs.

Daverena White took a chance on the American dream of homeownership -- and lost big.

Two former Bear Stearns hedge-fund managers have been acquitted of lying to investors about the implosion of the subprime mortgage market.