SEC Files Civil Fraud Suit Against Former Fannie And Freddie Execs | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

    SEC Files Civil Fraud Suit Against Former Fannie And Freddie Execs

    Six former top executives of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) "knew and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans" and have now been accused of securities fraud in a civil suit, the Securities and Exchange Commission just announced.

    As The Associated Press says, "those charged include the agencies' two former CEOs, Fannie's Daniel Mudd and Freddie's Richard Syron. They led the companies when the housing bubble burst in late 2006 and 2007. The four other top executives also worked for the companies during that time. The case was filed in federal court in New York City. Lawyers for Mudd and Syron couldn't be reached."

    According to the SEC, its complaint:

    "Alleges that, when Fannie Mae began reporting its exposure to subprime loans in 2007, it broadly described the loans as those "made to borrowers with weaker credit histories," and then reported ... less than one-tenth of its loans that met that description. Fannie Mae reported that its 2006 year-end Single Family exposure to subprime loans was just 0.2 percent, or approximately $4.8 billion, of its Single Family loan portfolio. Investors were not told that in calculating the Company's reported exposure to subprime loans, Fannie Mae did not include loan products specifically targeted by Fannie Mae towards borrowers with weaker credit histories, including more than $43 billion of Expanded Approval, or 'EA' loans."

    Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

    NPR

    'Heaven Knows What' Adds New Wrinkles To The Street Junkie Narrative

    The film slightly fictionalizes the experience of Arielle Holmes, a young homeless addict whom filmmakers Josh and Benny Safdie first encountered in Manhattan's Diamond District.
    NPR

    This Cajun Chicken Pizza Will Remind You Of Your Salad Days

    Chef James Rigato makes delicious seasonal dishes at his restaurant in Michigan. But perhaps what he is best known for is the pizza he created when he was just a teenager.
    NPR

    Reports: Ex-Speaker Hastert's Payments Linked To Sexual Misconduct

    Both The New York Times and the Los Angeles Times are reporting that Hastert was paying a man to not reveal that Hastert had abused him years ago.
    NPR

    Silk Road Founder Ross Ulbricht Sentenced To Life In Prison

    The creator of the shadowy online marketplace had faced at least 20 years in prison, but federal prosecutors had sought a "substantially" longer sentence.

    Leave a Comment

    Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.