Office of Federal Housing Enterprise Oversight Director James Lockhart criticized New York Attorney General Andrew Cuomo on Thursday for issuing subpoenas to Fannie Mae and Freddie Mac to force them to provide information about loans they have purchased from Washington Mutual.
Mr. Cuomo issued subpoenas to the two government-sponsored enterprises requiring them to hire an outside examiner to review the loans to see if they contained fraudulent appraisals. Mr. Cuomo said Fannie and Freddie had incentives not to examine appraisals too quickly.
In a letter to Mr. Cuomo, Mr. Lockhart said he was disappointed that OFHEO had not been contacted about the subpoenas, argued Fannie and Freddie had no economic incentive to tolerate fraudulent appraisals, and noted that the attorney general has not formally charged Wamu with any wrongdoing.
Mr. Lockhart requested a meeting with Mr. Cuomo concerning “your demand that two federally-chartered… enterprises cease doing business with a major federally-chartered bank, which you have not charged or subpoenaed, unless certain conditions stipulated by you are met.”
Mr. Lockhart also said he wants to discuss the scope of the independent examiner and “the potential expansion of the examination to other financial institutions from which the enterprises buy mortgages.”
