FBI Reportedly Investigating Fannie Mae, Freddie Mac For Role In Subprime Crisis

It’s been a bad month for Fannie Mae and Freddie Mac.

The Securities and Exchange Commission announced last week that it was suing half a dozen former executives from the mortgage giants, including the ex-CEOs of both companies. Now, the Federal Bureau of Investigation is reportedly asking questions about Fannie and Freddie’s behavior in the months preceding the financial crisis, according to The Daily.

At issue is whether Fannie and Freddie — two of the largest mortgage companies in the country, and the recipients of a major government bailout in September 2008 — misled the public and investors about the relative risk of their loans in the lead up to the financial crisis, the Daily reports. The matter has serious implications, since many allege that mortgage lenders’ enthusiasm for making loans to homeowners with shoddy credit, and banks’ penchant for using those loans as financial instruments, are among the principal reasons for the housing crash and financial crisis.

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