Federal Housing Finance Agency growing a pair?

[Po_d Mainiac]

KUDOS to the Federal Housing Finance Agency, overseer of Fannie Mae and Freddie Mac, the crippled mortgage finance giants. While some in Washington have continued to coddle the big banks even after they drove our economy into the ditch, this agency seems serious about recovering money for taxpayers by holding bad financial actors to account.

The agency announced last Monday that it had issued 64 subpoenas to a throng of unidentified financial services institutions, seeking documents related to mortgage securities that Fannie and Freddie bought from Wall Street during the boom years.
The subpoenas are designed to tell the agency what many of us want to know: How did Wall Street package and sell private-label mortgage securities to investors, even though the nature and quality of some of the loans crammed inside those tidy little packages were, at best, suspect?

It is clearly turning up the heat on the major players in mortgage servicing and securitization. Among the bigger trustees in the business are Deutsche Bank and the Bank of New York, while loan servicers include Bank of America and many more. None of the banks would confirm if they had received subpoenas.

http://www.nytimes.com/2010/07/18/business/18gret.html?_r=1&ref=gretchen_morgenson
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So how far will FhFA be allowed to proceed? A lot of the institutions that dumped the bags of dog turds (Fraudulent loans)on Fannie's door step may well be pushed off the cliff if they have to repurchase. The FDIC is currently in the red and would be ill equipped to handle another surge in zombie banks. (there are a shit load of them out there already. With the recent addition of 400 some-odd troubled banks to 350+/- already listed)

Stock indexes would do another flash crash (without the jump back) as 10-15% of the E/S and big board are financials

The effects from the neglect of the past administration along with Misters Greenscum and Bumhanky to contain the bubble, still has a lot of pain to inflict.

:popcorn: