California Attorney General's Office Subpoenas Fannie, Freddie

◼ Investigators with the state attorney general's office are seeking information on the roles of Fannie Mae and Freddie Mac as landlords who own thousands of foreclosed properties in California. - Alejandro Lazo and Jim Puzzanghera, Los Angeles Times

Investigators with the California attorney general's office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.

The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties. The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices, according to a person familiar with the matter.

In addition, investigators want to learn more about the companies' purchases and sponsorship of securities holding "toxic mortgages" in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity....

According to the person familiar with California's investigation, the central question posed by the California investigators is: To what extent did the two mortgage giants contribute to the foreclosure crisis in California?

Fannie and Freddie hold a vast number of loans in California. The major banks that are employed to act on their behalf — collecting payments from borrowers, foreclosing or evicting borrowers or striking deals with homeowners to modify their mortgages — must adhere to their guidelines.