Could this be the first in a wave of trouble headed for the two government owned leviathans??
It would seem that the Federal Housing Finance Agency (Herein referred to as FHFA) thought that California Attorney General Kamala Harris was bluffing, when she issued subpoenas last month to both Fannie Mae and Freddie Mac demanding answers to questions she had, as they directed the two firms to more or less disregard them. However, much to the FHFA’s surprise Ms. Harris has filed suit against the two firms to force them to answer her questions.
In response to the “petitions” filed yesterday against both firms, the FHFA (regulating body of both fannie and freddie) stated that the questions were “frequently vague and ambiguous”. They went one step further to say that it appears as if Ms. Harris is “engaged in an open-ended exploratory investigation” and that her investigation would only undermine their authority, and slow down operations.
One of the most pressing questions that is being pressed is whether the firms are aware of any drug dealing, prostitution, or other illegal activities, being conducted in vacant (read: foreclosed/Bank owned/REO) properties they own. Sounds like a pretty good question to me!! In response to this question the FHFA is saying that the amount of information and research that would be needed to catalog and appropriately address this question “would be nothing short of staggering”.
Both firms were taken over by the federal government about three years ago, in a conservatorship capacity, and through this deal we (tax payers) have sunk roughly $151 Billion into losses allegedly created/neglected by these firms. I for one feel that these questions need to be asked and answered, and if there was or is any gross negligence it is handled accordingly.
All of this being said the battle that we are seeing launched is not over the questions and answers, but rather over the ability of states to investigate firms held in a conservatorship capacity by the federal government. While there is precedent for states having the ability to shape federally held firms’ rhetoric, Ms. Harris is taking on a big challenge here; and I would not be surprised to see face massive opposition by politicians wanting to keep the past in the past…
I applaud her effort to try and bring our hindsight up to 20/20, and agree that there should be more scrutiny for the market collapse. Whether we will see it or not is another question, but stick around to find out how this plays out, as we will keep you updated on developments.
Below are the cover sheets of the suits filed yesterday! Click On The Images To Enlarge
After working with, and for, many different real estate firms, it became apparent to Harout that there was a major disconnect between what consumers needed/wanted and the service that was being provided to them. It was upon this realization that Harout founded and opened JohnHart Real Estate; and as the CEO/Principal Broker he has continued to break from the norm and redefine real estate with an insatiable appetite to give his clients the service and attention they deserve.
