"What’s this? The Federal Housing Finance Agency (“FHFA”) sent subpoenas to 64 issuers of mortgage-backed securities? The agency’s press release said that it’s trying to determine whether issuers are liable for Fannie’s and Freddie’s investment portfolio losses? The subpoenas are seeking loan level data, related to underwriting, performance, and servicing too?"


Georgetown at 13:30 2010-07-14 said:
Once again Mandelman has it right. The announcement that FHFA is building cases should make many folks involved in the lending industry very nervous. While this first round, and it likely is just the first round, of inquiries targets poolers and servicers the next step in the chain will be originators. Do you really think the poolers will take the heat without trying to cut a deal to avoid spendin time at Club Fed? FHFA correctly calls their work an inquiry. Criminal cases will be brought by DOJ using the evidence compiled.

While this will be a complex case, my friends in banking remember that it was the FDIC that exacted several multi-billion dollar settlements from the Big 8 accounting firms for their part in thrift failures. How many of those Big 8 firms are still around? Permalink

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