The Government Entities Appear To Want In On The Fun!

Posted By on October 21, 2010

The regulator for Fannie is set to get litigious …..

OCTOBER 21, 2010
By NICK TIMIRAOS

The federal regulator overseeing Fannie Mae and Freddie Mac hired a law firm specializing in litigation as the agency considers how to move forward with efforts to recoup billions of dollars on soured mortgage-backed securities purchased from banks and Wall Street firms.

The Federal Housing Finance Agency, which in July issued 64 subpoenas to issuers of mortgage securities, bank servicing companies and other entities, is working with Quinn Emanuel Urquhart & Sullivan LLP, a Los Angeles-based firm that specializes in business litigation, to coordinate its investigations.

In a statement, the FHFA said it is analyzing requested information and that “no decisions for future action have been made.” Quinn Emanuel confirmed its hiring by FHFA but declined to comment further.

Since the financial crisis, 400-lawyer Quinn Emanuel has avoided building a banking clientele, making it a top suitor for plaintiffs pursuing banks. The firm has represented MBIA Insurance Corp. in several lawsuits against top U.S. mortgage banks alleging that the insurer was fraudulently induced to cover losses on mortgage-backed securities. Those cases are ongoing.

The FHFA hasn’t disclosed the targets of its subpoenas, though some banks have acknowledged receiving them, including J.P. Morgan Chase & Co. The probe is focused on so-called private-label securities that were originated by mortgage companies, packaged by Wall Street firms and then sold to investors.

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