The court battle between the Federal Housing Finance Agency and Nomura Holdings is nearing a climax after three weeks, as both sides have presented closing arguments. Nomura and the Royal Bank of Scotland, also a defendant in the case, are the first two financial institutions out of 18 sued by the FHFA in 2011 that failed to reach a settlement and took the case to trial. FHFA sued the 18 institutions to recoup U.S. taxpayer costs following the government's $188 billion bailout of Fannie Mae and Freddie Mac in 2008, after which the government seized control of both Enterprises.
In the closing arguments, Nomura's lawyer said that the losses incurred by the FHFA were due to macroeconomic factors and not false or misleading statements by the banks, saying the FHFA used "voodoo science" to evaluate the securities. A lawyer representing the FHFA pointed to widespread misrepresentation of the quality of mortgage-backed securities on the part of banks leading up to the economic downturn and accused the banks of "deceit" and "colossal incompetence."
The U.S. Department of Treasury's Director of Marketing and Outreach in the Homeownership Preservation Office, Carol Lambert, has announced that she will no longer work in that capacity effective Friday, April 10, and instead is moving to another position within Treasury. Lambert was instrumental in starting Treasury's Making Home Affordable Program in 2009, which the government began in response to the devastating financial crisis of 2008 and to help families avoid foreclosure. She has continued to promote the program for the last six years, during which time MHA has helped more than one and a half million families.