US Agency Hires Quinn Emanuel in Probe of Mortgage-Backed Securities
Posted Oct 21, 2010 11:45 AM CDT
By Debra Cassens Weiss
Quinn Emanuel Urquhart & Sullivan has avoided taking on banking clients since the mortgage meltdown began, making it a go-to law firm for plaintiffs suing banks.
Now the law firm’s strategy has brought a new, high-profile client—the Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac, the Wall Street Journal (sub. req.) reports.
The FHFA has issued 64 subpoenas to banks and other entities involved in packaging and selling mortgage-backed securities, the story says. The hiring of the law firm could highlight attempts to recover losses on soured mortgage securities purchased by Fannie and Freddie as investments during the housing boom. The government took over the two mortgage giants after their collapse.
The subpoenas could help Fannie and Freddie access loan files showing that loans didn’t meet underwriting standards or that ownership wasn’t properly transferred during the securitization process, the Wall Street Journal says. That could pave the way for challenges by other investors.
The New York Times DealBook blog noted the story.