FHFA Looks to Reduce GSE Liability For Losses on Private Label MBS Investments
The Federal Housing Finance Agency (FHFA) has issued subpoenas to 64 companies seeking loan documents and other information related to private-label mortgage-backed securities (PLS). The PLS are those that the two government sponsored enterprises (GSEs) Freddie Mac and Fannie Mae invested in during the housing boom. FHFA refused to divulge the identities of the parties to whom the subpoenas have been addressed, beyond saying that they were directed to the trustees and servicers controlling or holding the documentation. The purpose was to obtain loan files and other transaction documents pertaining to the PLS in order to analyze them and determine whether losses sustained by the GSEs from their investments are "the legal responsibilities of others." The subpoenas target only those…(read more)
