Fannie May Need Lawyers, Guns and Money

In case you missed the story broken by National Mortgage News on Monday here's the summary: FHFA's Office of Inspector General is looking for a firm to evaluate mortgage servicing rights. It won't give a reason but industry advisors familiar with the issue say the IG's office is investigating Fannie's purchase of $74 billion of MSRs from Bank of America. (A spokeswoman for the FHFA IG had no comment.) For months we've been hearing gossip that some IG investigators carry guns – and that IG Steve Linick has said as much in meetings with senior executives of Fannie Mae and Freddie Mac. Then, yesterday in The Wall Street Journal we read this: “When Steve Linick first met senior managers at Fannie Mae and Freddie Mac early this year, he told them he would be no ordinary Washington regulator. His office has the power to make arrests, issue subpoenas and conduct searches, and some of his employees carry badges and guns.” Okay, they need to carry guns for what purpose? Have Fannie's employees been robbing the soda machine to make up for their lost pensions?