FHFA Issues Subpoenas for PLS Documents
Hat tip Calculated Risk for pointing us to the FHFA Issues Subpoenas for PLS Documents at the FHFA website.
CR notes that
Many of the originators of the PLS mortgages are no longer in business (New Century, etc.), however most of the PLS issuers still exist.
Update: From the The Washington Post
Fannie and Freddie together own about $255 billion in private-label securities. These securities included subprime loans, which were extended to people with thin or weak credit histories, as well as exotic loans such as adjustable-rate mortgages known as option ARMs. Option ARMs allowed borrowers to treat their mortgages as credit accounts, paying a small minimum payment each month while their balance grew to an unsustainable size.
Later analysis has shown that these types of loans were sometimes made on fraudulent grounds — and that the companies that packaged the loans and sold them to investors didn’t perform the appropriate oversight to ensure they were on the up-and-up.
Freddie said in a recent regulatory filing that lenders owe it $4.8 billion, up 26 percent from three months earlier. The company said a third of its demands to lenders for compensation have gone unfulfilled for three months. Fannie doesn’t disclose similar numbers.