Seventeen of the nation’s “too big to fail” banks also apparently think they are “too big to lose in court.” They have joined forces to go up against a federal judge whose rulings they simply don’t like.
In doing so, the banks may have opened a Pandora’s box that ultimately could benefit the same group of people they have been going after – homeowners facing default on their mortgage.
First the back story:
A bunch of corporate attorneys representing JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley and Barclays, to name a few, recently took on U.S. District Court Judge Denise Cote by filing what is known in legal jargon as a “writ of mandamus” the purpose of which is to toss out a number of rulings she has made regarding the discovery process. Someone who believes they are denied a legal right generally files such a writ.
That’s a bold step to take against a member of the judiciary who holds your case in her hands. And, even bolder because of whom filed it. But if it works for them, what’s not to say it will not work for attorneys seeking to preserve the due process of homeowners who have been whisked through the courts like cattle off to slaughter?
Known as a no-nonsense judge who emphasizes efficiency in large, complex cases, Cote is handling one of the highest-stakes cases against the banks to date. The lawsuit, which was brought against the banks by the Federal Housing Finance Agency, alleges that the banks duped it into buying $200 billion in mortgage-backed securities without revealing the sloppy underwriting job. The agency, which oversees Fannie Mae and Freddie Mac, wants the banks to repurchase the bad loans.