Photo: Fox Business News
Earlier this week, Goldman Sachs and Wells Fargo got Wells Notices, a warning from federal regulators, saying that they may be investigated for their part in creating and packaging faulty mortgage backed securities and causing the global financial down turn.Then, Bloomberg reported that JP Morgan admitted they got one too.
This doesn’t mean that any of these parties will get into trouble. The Wells Notices state that any charges would be civil (not criminal) and again, they are just a warning. Still, this is the first time that the banks have been charged for the creation of these toxic assets.
There will likely be more. The big mortgage settlement from earlier this month left banks WIDE open to any charges that have to do with how mortgage backed securities were created.