California's attorney general has filed a lawsuit against Fannie Mae and Freddie Mac, demanding that the 2 companies respond to questions as part of a state investigation.
The office of Attorney General Kamala Harris, has filed the lawsuit, which demands that, the 2 mortgage firms, which own 60% of the mortgages in California, respond to questions on the companies’ contribution to the mortgage crisis. The California Attorney General wants Fannie Mae and Freddie Mac to respond to 51 investigative subpoenas, asking them to identify all the homes in California that they have foreclosed.
The lawsuit is also asking the 2 mortgage companies to disclose whether they have any information about the reduced value of those residential properties due to criminal activity, including drug dealing and prostitution or the location of weapons on those properties. The mortgage firms are also being asked to disclose whether they are in full compliance with civil rights laws that protect certain groups of people, like members of the Armed Forces and minority communities from unlawful convictions and foreclosures.
California personal bankruptcy lawyers will definitely monitor the proceedings in this lawsuit. At the crux of the lawsuit is a question about whether states have the right to question mortgage firms which are governed by federal law. However, the California Attorney General says that since Fannie Mae and Freddie Mac owned properties in California, they are subject to California laws.
Fannie Mae and Freddie Mac were taken over by the federal government in an attempt to save them from collapse in 2008. The 2 companies were placed in a conservatorship under the Federal Housing Finance Agency. The agency’s attorneys say that the subpoenas presented by the California Attorney General's office are vague and ambiguous. The companies also claim that the state attorney general does not have the power to issue subpoenas against the federal agency.
Saturday, December 31, 2011
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