U.S. Subpoenas 64 Issuers of Mortgage Securities

The Wall Street Journal reports:

A federal regulator said it sent 64 subpoenas to issuers of mortgage-backed securities in an effort to probe whether the firms misled Fannie Mae and Freddie Mac, two of the biggest investors in privately issued bonds.

The subpoenas, issued on Monday by the Federal Housing Finance Agency, which oversees the government-backed mortgage titans, could lead the government to recoup some of the billions of dollars that Fannie Mae and Freddie Mac lost when they scooped up mortgage-backed securities issued by Wall Street banks during the housing boom.

The FHFA didn't disclose its targets. But the top private issuers of mortgage securities included Bear Stearns Cos. and Washington Mutual Inc., which were taken over by J.P. Morgan Chase & Co., as well as Countrywide Home Loans and Merrill Lynch, which were taken over by Bank of America Inc. Deutsche Bank AG and Morgan Stanley were also among the top issuers. All the banks declined to comment.

No word yet from Rahm Emanuel formerly of Freddie Mac on this one.