Months ago Mortgage Blues said lawsuits would begin once people sorted out pieces left from the subprime implosion. This morning we focus on the Ohio Public Employees Retirement System, which represents nearly 900,000 current and retired government employees and their beneficiaries. This group lost up to $27.2 million in the crash, the lawsuit alleges. (Ohio has been hard hit by foreclosures and one of their representatives – Republican Bob Ney – went to prison.) Now Attorney General Marc Dann alleges Federal Home Loan Mortgage Corp. (Freddie Mac) “secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times.”

The Ohio attorney general is not the only party attempting to hold mortgage lenders responsible. Although this statement refers to Freddie Mac one should look for the precedent:

“By authorizing me to bring this suit on their behalf (state pension officials) are protecting the interests of the pension plan, the workers and retirees who depend upon it and the taxpayers whose hard-earned dollars fund it,” Dann said. “And they are also sending a loud and clear message to Wall Street that this type of fraud and manipulation will not be tolerated by the people who live on the Main Streets that are being devastated by what Freddie Mac has done.”

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