US 'to sue' dozen banks over housing bubble mortgages

The US is planning to sue more than a dozen major banks for misrepresenting the quality of mortgages they sold during the housing bubble, the New York Times reports.

The Federal Housing Finance Agency(FHFA) will argue the banks should have known the securities were not sound.

Bank of America, JPMorgan Chase and Goldman Sachs are to face action, according to the paper's sources, and suits could be filed as early as Friday.

The FHFA - which oversees mortgage giants Fannie Mae and Freddie Mac - blames the banks for failing to perform adequate checks on the quality of mortgage securities they sold on to investors before the financial crisis in 2008.

Fannie Mae and Freddie Mac lost more than $30bn (£18.5bn), partly because of the deals, and had to be bailed out by the government.

The suits follow subpoenas the finance agency issued to banks last year, according to the newspaper.