Venable partner Ron Glancz commented on the sixteen lawsuits in which a government-sponsored enterprise alleges that issuers of securities the bank purchased mislead the bank about the quality of the underlying mortgages in the private-label mortgage-backed securities it purchased. Now, the Federal Home Loan Bank of Seattle (FHLBS) wants its money back.

Many on Wall Street fear the FHLBS suits could open the door for other banks and investors to pursue new claims against them for packaging and selling bonds backed by alt-A and subprime mortgages.

"It generally takes a couple of years after a major financial crisis, like the savings and loan debacle, for the litigation phase to develop," said Glancz." I think this is just the beginning of what I think will be a tidal wave."

Glancz believes there will be copycat lawsuits from other companies that lost money on mortgage backed securities. "Every case is different, but in terms of legal theory [FHLBS’ argument] would be valid for other cases."