Their problems arose from investments in residential mortgages and residential mortgage-backed securities investments they had always been free to engage in.
"This market was the hardest hit last year, " notes Chandra Bhattacharya, a Credit Suisse strategist who specializes in residential mortgage-backed securities.
He says the program could be expanded over time to include commercial mortgage-backed securities, certain residential mortgage-backed securities and other assets.
The charge is in connection with the sale of a synthetic collateralized debt obligation that was tied to the performance of subprime residential mortgage-backed securities.
Last week Schneiderman filed a civil lawsuit alleging extensive fraud by Bear Stearns during the sale of residential mortgage-backed securities leading up to the housing crisis.
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The Fed will exchange the Treasury notes for other securities, including federal agency debt, federal agency residential mortgage-backed securities and nonagency AAA-rated private-label residential mortgage-backed securities.
His latest comes in a lawsuit filed against Credit Suisse in which he accuses the Swiss bank of misleading investors over the quality of residential mortgage-backed securities.
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The Fed itself has targeted the housing sector through monetary policy, buying residential mortgage-backed securities in order to push interest rates down and provide further relief to mortgage-holders.
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In these days of collateralised-debt obligations and residential mortgage-backed securities, there is no textbook to tell central bankers exactly what to do when liquidity in the interbank market dries up.
In that case the SEC alleged that Goldman misstated and omitted key facts regarding a synthetic collateralized debt obligation (CDO) it marketed which hinged on the performance of subprime residential mortgage-backed securities.
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The facility may be expanded over time and eligible asset classes may be expanded later to include other assets, such as commercial mortgage-backed securities, non-agency residential mortgage-backed securities or other asset classes.
According to Katy Burne at The Wall Street Journal, Beal is working to bring bondholders together to investigate potential misrepresentations and contract breaches by the banks that sold residential mortgage-backed securities.
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On August 15, 2011, Allstate Insurance Company filed suit in New York state court against Goldman Sachs and certain of its affiliates for violations of state fraud and negligent misrepresentation laws involving residential mortgage-backed securities.
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After unveiling a fourth round of long-term asset purchases, or quantitative easing, and a new threshold-based guidance, the Federal Reserve has put itself on a path of unlimited purchases of Treasuries and residential mortgage-backed securities (RMBS) until the unemployment rate falls.
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Some of the soured assets Beal purchased at fire-sale prices were residential mortgage-backed securities that were sold in deals in which banks made representations and warranties about loan quality and promised to repurchase those loans if the representations were no good.
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The suits come out of the Residential Mortgage-Backed Securities Working Group, a state-federal task force created by President Obama earlier this year to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.
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The Company intends to use the proceeds from the offering and concurrent private placement to acquire its target assets, which consist of residential mortgage-backed securities issued or guaranteed by U.S. Government-sponsored entities , residential mortgage-backed securities that are not issued or guaranteed by U.S. Government-sponsored entities and other mortgage-related investments.
Indeed, the Fed has spent those years buying up residential-mortgage backed securities in their attempt to take toxic assets out of the market and push down mortgage rates.
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Perhaps the most striking characteristics of today's agreement - which amends a draft first published in 2010 - is that banks will be allowed to include corporate bonds, some shares and high-quality residential mortgage backed securities in their permitted stocks of liquid assets.
"Profits were under pressure, " notes Warren Kornfeld, managing director and co-head of residential mortgage backed securities at Moody's, of the subprime sector.
In this important mortgage-backed securities case, attorneys for the New Jersey Carpenters Vacation Fund allege that misstatements and omissions regarding residential mortgage loans in offering documents relied upon by buyers of certain mortgage-backed securities resulted in material losses.
Schneiderman plays a dual role here, as New York AG and co-head of the Obama administration Residential Mortgage Backed Securities Working Group.
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