The Federal Housing Finance Agency put out a statement Tuesday defending the slew of lawsuits filed against major financial institutions for mortgage-backed securities sold to Fannie Mae and Freddie Mac during the housing boom. In total, 17 banks face possible penalties for allegedly misrepresenting the quality of the collateral backing these securities. According to the lawsuits, the FHFA found evidence of violations in $190 billion worth of MBS sold to Fannie and Freddie. The allegations range from misrepresented loan-to-value ratios, employment and occupancy status of the borrower. But the FHFA stressed in a statement Tuesday that the damages being sought in the suits will not be based on the original amount of the securities purchased, rather the recoveries of losses associated with the alleged violations. "At this time, it would be premature and potentially misleading to estimate the size of any potential recoveries. However, press reports that FHFA is seeking nearly $200 billion in damages or recoveries are excessive," the agency said. Investment bank Keefe, Bruyette & Woods estimated it would take roughly $60 billion to remedy the claims, however analysts said a settlement could be made for less. "Actual recoveries will be determined based on filings by the parties, evidence and judicial findings," the FHFA reiterated. The FHFA also defended its actions to those who claim the suits will only hamper lending and further postpone the already stalled economic recovery. "While everyone is concerned with these important issues, the long-term stability and resilience of the nation’s financial system depends on investors being able to trust that the securities sold in this country adhere to applicable laws," the FHFA said. Curiously, the FHFA stated it "has not filed suit against every issuer, nor on every PLS purchased by the Enterprises" but rather it "has filed suit where it believes it has evidence of violations substantial enough to warrant such remedies." As HousingWire reported on Friday, the FHFA did not file a lawsuit against Wells Fargo (WFC). This could mean the FHFA did not find enough evidence of misrepresentation from Wells to warrant a lawsuit. An FHFA spokesperson had no comment regarding Wells Fargo. Write to Jon Prior. Follow him on Twitter @JonAPrior.