California AG Harris Sues GSEs

California Attorney General Kamala Harris has sued Fannie Mae and Freddie Mac, claiming the companies have obstructed her office's investigation into mortgage lending and servicing activities.

According to multiple media reports, Harris' lawsuit stems from the government-sponsored enterprises' (GSEs) refusal to respond to subpoenas issued by Harris Nov. 15. Harris' subpoenas reportedly sought answers to 51 questions. Fannie Mae and Freddie Mac have not responded, the suit says, because of the Federal Housing Finance Agency's position that federal law preempts states from subpoenaing the companies.

Harris' multifaceted probe in mortgage practices reportedly deals with a variety of issues, including whether foreclosed homes backed by GSE loans were used for drug dealing and prostitution. Harris is also reportedly investigating whether servicers have wrongly evicted servicemembers, whether property taxes are being paid, and the companies' parts in issuing and selling mortgage-backed securities to state agencies.

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