Federal agency investigating Freddie and Fannie investments
This morning, the Federal Housing Finance Agency announced that it could be investigating the investments of mortgage companies Freddie and Fannie. Bank loan information has been subpoenaed dealing with the securities purchased by the companies. The FHFA believes that some of the liability for these securities may be with the sellers.
Article source: Federal agency investigating Freddie and Fannie investments by Personal Money Store
The questionable investments made by mortgage giants
Investments made by major federal lenders are now being investigated as questionable. The value of these packaged securities dropped . Many of these packaged securities involved mortgage short term loans for individuals with a bad credit score. Toxic assets like this being so easily invested in may have possibly contributed to the bubble of the housing market.
Loan information subpoenaed
After taking control of Fannie and Freddie, the Federal Housing Finance Agency issued 6$ separate subpoenas. For a while, the agency tried to get the information from the banks and lenders voluntarily, but encountered severe resistance. There is some concern the sellers of these packaged securities obscured the reality of the risk behind the loans.
The way the subpoenas could change things
The details that has been subpoenaed is intended to discover out if lenders hid some info. Paying for the loss could be the responsibility of the firms that sold the packages, if they did hide information. This payback is important, since Freddie and Fannie have lost more than $1$ 5 billion of taxpayer money . If you will find any lies discovered in the loan documents, then the sellers may have to pay for money lost. The companies that offered these quick personal loans products may very well have gone out of business.