The WSJ has just reported that the GSEs [government-sponsored enterprises] have hired law firm Quinn Emanuel as the "agency considers how to move forward with efforts to recoup billions of dollars on soured mortgage-backed securities purchased from banks and Wall Street firms... The FHFA [Federal Housing Finance Agency] hasn't disclosed the targets of its subpoenas, though some banks have acknowledged receiving them, including J.P. Morgan Chase & Co. The probe is focused on so-called private-label securities that were originated by mortgage companies, packaged by Wall Street firms and then sold to investors."
From WSJ:
The FHFA's efforts could ultimately lead to a settlement that would avoid protracted legal battles, analysts said.
"There's going to be much more incentive to negotiate seriously and quickly than if they had done this seven months ago, when people were blithely ignoring the fraud," says William K. Black, a former federal bank regulator who is now an associate professor at the University of Missouri-Kansas City School of Law.
Estimates about banks' ultimate exposure vary considerably because it isn't clear how aggressively investors will pursue claims, or how successful they will be. Banks could face between $55 billion and $179 billion in repurchase demands from investors, according to Compass Point Research & Trading, a Washington boutique investment bank. Estimates from FBR Capital Markets say repurchase demands could be lower, between $24 billion and $51 billion.
The FHFA subpoenas could mark the beginning of a new attempt to recover losses on soured mortgages from banks.
No comments:
Post a Comment