California Attorney General Sues Fannie, Freddie
California Attorney General Kamala Harris filed lawsuits against Fannie Mae and Freddie Mac Dec. 20 demanding that the government-sponsored enterprises respond to 51 investigative subpoenas asking them to identify all California homes on which they foreclosed, the Washington Post reported.
Fannie and Freddie own approximately 60 percent of California’s mortgages.
The lawsuits against the two GSEs also demanded that they release information on the decreased value of homes due to drug dealing or prostitution, as well as explosives and weapons found on the properties. The filing in San Francisco Superior Court also seeks to determine what role the GSEs played in selling or marketing mortgage-backed securities, whether they have complied with civil rights laws protecting minorities and members of the Armed Forces against unlawful convictions and foreclosures and if they have complied with California’s securities and tax laws.
An attorney representing the Federal Housing Finance Agency, which oversees the GSEs, responded in writing and noted that the 51 subpoenas were “frequently vague and ambiguous,” the Post reported. Additionally, the response noted that state attorneys general do not have the authority to issue subpoenas against the federal conservator and that “the burden to collect that information would be nothing short of staggering.”
The lawsuits could help determine whether states have the ability to investigate the GSEs while they are under federal conservatorship. Harris argued that since the mortgage companies own properties in California, they are subject to state law and demands, the Post reported.