Alleging that executives at Fannie Mae and Freddie Mac failed to provide investors with necessary information in the leadup to the housing market collapse, the Securities and Exchange Commission may soon take action.
For Fannie, one of the main allegations is that executives oversold mortgage loans as being “prime” when they were certainly a riskier buy than advertised. For Freddie, execs are being accusing of not sufficiently warning investors about the risky nature of subprime loans.
If the SEC takes action, it could lead to a conflict with the agency that most closely regulates Fannie and Freddie, the Federal Housing Finance Agency. According to the Post, FHFA officials believe the disclosures provided by Fannie and Freddie were sufficient.