The article, along with its accompanying video-report, cites the opinions of two experts who claim that suing the banks, at this time, will delay the already slowing economic recovery process. David John asserts, “We are in perilous economic waters at this point, you’re adding another level of insecurity to the banking sector – that’s just going to make people even more nervous.” (Fox News) John; The Heritage Foundation’s lead analyst on issues relating to pensions, financial markets and institutions, banking regulation, asset building, and social security reform, (The Heritage Foundation) also warns that the added pressure put on the banks as a result of the lawsuits could make lending even tighter. This, in turn, would prolong the housing crisis and make the recovery much more difficult. (Fox News)

The accompanying video report also cites Tim Rood, the former Director of Fannie Mae. Rood’s taped interview supports David John’s assessment, as Rood claims, ”Housing is roughly 20 -30% of the economy... the consequences of a bad move in that are pretty substantial to a fragile economy like this.”

Reasoning/Fallacy: This claim appears to be an example of Argument from Authority. Both experts have worked in the financial and banking fields for decades. However, Fox News’ use of Tim Rood as an expert to support the claim may be considered biased and somewhat damaging to his credibility because he was the Director of one of the organizations that the defendants allegedly victimized. Fox News may argue that this is precisely why he is a credible source of information because of his intimate knowledge of the issue at hand. Furthermore, it should be noted, that Rood currently is a Partner and Director of The Collingwood Group, a consulting agency for financial service companies.

Both experts offered their statements shortly after the lawsuits were filed. That being said, they did not provide many reasons for their opinions, or at least, the report was edited in such a way. Despite the Fox News report’s brevity, there are many other experts in the field who are making the exact same claim. In a Reuters report posted on MSNBC.com, the authors echo the opinion of such experts when stating “Such payouts would reduce earnings and weaken capital levels, perhaps harming the ability of banks to lend money and provide much-needed life to a stalled housing market and weakened economy.” (Stempel)

Fact Check: Tim Rood’s claim that housing makes up 20-30% of the U.S. economy may not be entirely accurate. Despite the significant ramifications in dealing with such a wide range allotted by Rood’s estimate, About.com states that real estate only accounts for 10% of the GDP. (Amadeo) According to the National Association of Home Builders, housing contributes 17-18% of the GDP. (National Association of Home Builders) Either way, both sources cite lower numbers than those offered by Rood.