Fannie Mae regulator sues UBS over $900-million loss
The regulator for Fannie Mae and Freddie Mac has sued UBS, accusing the Swiss bank of misleading the housing agencies into buying risky mortgage debt, resulting in more than $900 million in losses.
The lawsuit by the Federal Housing Finance Agency is the latest effort by Washington to prop up the government-sponsored enterprises, whose September 2008 federal seizure has so far cost taxpayers more than $135 billion.
The regulator said Wednesday that more lawsuits are planned to recover losses by Fannie Mae and Freddie Mac in private-label debt.
The mortgage finance companies in 2010 guaranteed 70% of single-family mortgage-backed securities issued, and provided $1.03 trillion of market liquidity that year, a housing finance agency report issued to Congress in June shows.
“From the issuance of 64 subpoenas last year to the filing of this lawsuit and further actions to come, we continue to seek redress for the losses suffered,” FHFA Acting Director Edward DeMarco said in a statement.
UBS spokesman Peter McKillop had no immediate comment.
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