OFHEO Blasts Cuomo on GSE Subpoenas
The federal regulator of Fannie Mae and Freddie Mac has blasted New York Attorney General Andrew Cuomo for subpoenaing the two Government Sponsored Enterprises in connection with an appraisal fraud probe, arguing that “they have no economic incentive to knowingly purchase or guarantee mortgages with inflated appraisals.”
Other than the initial premium they may have received or false appreciation of the stock value tied to their volume of mortgages.
“I am disappointed that your office did not contact OFHEO before or even after subpoenaing the GSEs and issuing certain threats regarding their future business activities,” writes OFHEO Director James Lockhart in a Nov. 8 letter to AG Cuomo.
Mr. Lockhart wants an explanation from Mr. Cuomo in regard to his demand that the government-sponsored enterprises cease doing business with {tag-cat]Washington Mutual[/tag-cat], a large seller of mortgages to the GSEs.
Earlier this week the New York AG said his office would subpoena the GSEs as part of a wider probe into mortgage industry practices.
OFHEO is suppose to be the safety and soundness regulator of Fannie and Freddie.
Tags: Fannie Mae, Freddie Mac, Government Sponsored Enterprise (GSE), Lenders With Problems 2007, Mortgage News
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