After being stung in the courtroom earlier this year as he failed in an attempt to intervene in a series of foreclosure actions, Ohio Attorney General Marc Dann is refocusing his efforts on broader legal initiatives. Dann said he is considering a shareholder lawsuit against Fannie Mae over investor disclosures, as well as looking to expand an ongoing investigation into lending practices, Reuters reported Wednesday. Dann sued Freddie Mac in late January, filing securities fraud class action lawsuit in federal court in Youngstown, Ohio that alleged the GSE failed to adequately disclose its subprime mortgage exposure. Regarding Fannie, Dann said at the Reuters Housing Summit in New York that “it appears that they also failed to advise their shareholders of the extent of their subprime holdings.” Dann also said he will subpoena 15 additional mortgage companies as part of an ongoing investigation into lenders’ practices during the housing boom, although he did not identify the firms his office will be targeting. From Reuters:
… Dann argues that industry players knowingly sold loans to inappropriate customers as others passed on risky loans to investors. “We’re going to issue our next wave of subpoenas in the next couple of weeks. We’re working our way up the ladder,” he said at the Reuters Housing Summit in New York. … Ultimately, Dann said he wants to bring his mortgage fraud cases to a jury trial, rather than seek settlements. “The only way to send a message to folks in this town (New York) is by suing them. We’ve got to step up and hold them accountable,” he said. “If I can get this case to a jury in Ohio, you can’t fit enough zeros on the check.”
Dann has been a vocal critic of the mortgage lending industry for years, and the state he represents historically posts one of the nation’s higher foreclosure rates due largely to a weak economy in key statewide job markets.