Judicial Watch sues FHFA over MBS disclosures
Judicial Watch filed suit against the Federal Housing Finance Agency, claiming the regulator failed to turn over information on private-label mortgage-backed securities acquired from 17 banks.
FHFA declined to comment. Judicial Watch representatives said the document request is part of a massive push for transparency at the FHFA, Fannie Mae and Freddie Mac. The FHFA became the conservator of the mortgage giants after the housing meltdown in 2008.
"We think the facts and law are on our side. We think if the judge follows the facts and the law, we will get the documents," Tom Fitton with Judicial Watch said.
The document probe is not limited to MBS purchases. The push for internal documents is designed to get access to records that will show decision-making at Fannie Mae and Freddie Mac and shed light on the companies' relationship with financial firms, Fitton said.
In the complaint filed with the U.S. District Court for the District of Columbia, Judicial Watch said it submitted a freedom of information request to the FHFA in September, asking for records describing losses that Fannie Mae and Freddie Mac incurred on private-label mortgage-backed securities.
A month later, the FHFA denied the request saying the information could be withheld under four exemptions to the Freedom of Information Act.
Judicial Watch moved to appeal, and the case has been on hold since December.
The nonprofit organization filed the complaint to compel production of private-label MBS documents and to prevent FHFA from withholding nonexempt records.
This is not Judicial Watch's first attempt to compel FHFA records. A federal appellate court denied an attempt to gain access to internal FHFA documents last year. In that request, Judicial Watch wanted documents regarding political contributions made by Fannie and Freddie.
In that case, the U.S. Court of Appeals in the District of Columbia Circuit upheld a lower court ruling in deciding the records requested under the Freedom of Information Act were never "agency records" fully in the FHFA's control; therefore, those records were not compelled.
The judicial watchdog group claims the documents became official agency records tied to the FHFA when the federal regulator took the mortgage finance giants into conservatorship in September 2008. The appeals court ruled not all of the factors were met to show that FHFA was actually in control of the documents requested.