California sues Fannie and Freddie

Attorney General Kamala Harris had subpoenaed the two mortgage giants, asking them to provide information on the mortgages they purchased and the foreclosed properties they owned in California. But the Federal Housing Finance Agency said the subpoenas were "frequently vague and ambiguous" and told Fannie and Freddie not to comply. From the WSJ:

Among other things, the subpoenas asked for a record of every vacant home owned by the companies in the state and asked the firms whether they were aware of drug dealing, prostitution or the presence of explosives and radioactive material in those homes. The FHFA said the state appeared to be "engaged in an open-ended exploratory investigation" that would undermine the FHFA's authority while placing an extra burden on the operations of the firms. The effort required to collect the "voluminous amount of information" required to comply "would be nothing short of staggering," the FHFA said in its letter.

At issue in the suit is whether states can investigate the two mortgage firms while they are under conservatorship by a federal regulator. Sorry, but I'm not sure how this litigation, which could easily drag out for years, helps resolve the mortgage crisis.