Fannie, Freddie Owe California Some Answers

Daniel Mudd Richard Syron CEOs Freddie Mac Fannie Mae

You might think that, after the collapse of the California housing market and not coincidentally the state's economy, the federal mortgage lending giants Fannie Mae and Freddie Mac would be quick to answer Californians' questions about what went wrong and how it might be fixed.

If you think that, of course, you think wrong.

Fannie Mae and Freddie Mac aren't merely refusing to answer questions from the state. Their legal position is that they don't have to.

They're even defying a subpoena from California Attorney General Kamala Harris, who is investigating mortgage fraud. The state is now suing Fannie and Freddie to demand answers, the LA Times reports.

This is shameful, but unsurprising.

The federal mortgage lenders have been blamed for far too much of the country's housing and economic difficulties, and they are dug in against attacks from the right. However, the lenders have helped fuel those attacks, through years of resisting accountability and bullying those who ask questions. It would be far better if Fannie and Freddie embraced the attorney general's inquiry and used it as a way to improve its operations and explain itself to the public.

There is also a matter of obligation.

There's no clear legal precedent that permits Fannie and Freddie to ignore a California subpoena.

California, as of this writing, is still one of the 50 states, and its economy -- and thus the economy of the nation -- is being held back by problems in the housing market. And U.S. taxpayers -- the largest group of which are Californians -- have provided the mortgage giants with $150 billion in bailout.

For that kind of money, and with such high economic stakes, Fannie Mae and Freddie Mac shouldn't have to be subpoenaed to answer questions. They should give the state of California, and its taxpayers, whatever information we ask for as fast as is humanly possible.

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