Subpoenas for Private Mortgage Bonds

The Agency responsible for federal regulation of Fannie Mae and Freddie Mac has issued 64 subpoenas in an attempt to determine whether or not some of the issuers of private mortgage bonds are liable for losses taken by Freddie Mae and Freddie Mac.

The FHFA has joined this aspect of the investigation because the two financing giants have had difficulties obtaining the correct documents during their personal searches. Although the names of those being subpoenaed were not released, a number of Wall Street banks are among the biggest private mortgage bond issuers.

If the subpoenas result in liability amongst the private banks, the FHFA will use the additional funds to offset taxpayer injections.