Economy

Fannie Mae, Freddie Mac sued by California

California Attorney General Jerry Brown sued federal mortgage lending giants Fannie Mae and Freddie Mac for blocking green financing programs around the state, saying the agencies' actions put more than $100 million in federal stimulus funding at risk.

In a filing in U.S. District Court in San Francisco on Wednesday, Brown said the federal housing agencies have effectively shut down the programs, which provide homeowners with financing for solar panel installations and other energy retrofits.

The move has forced clean energy companies to lay off workers and is hampering the state's economic recovery, the suit said.

"As the nation struggles through the worst recession in modern times, California is taking action in federal court to stop the regulatory strangulation of the state's grass-roots program that is spreading across the country," Brown, the Democratic nominee for governor, said in a news release.

The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, said it has no plans to change course despite the lawsuit.

"In keeping with our safety and soundness obligations, the Federal Housing Finance Agency will defend vigorously its actions that aim to protect taxpayers, lenders, Fannie Mae and Freddie Mac," said Edward DeMarco, FHFA's acting director.

To read the complete article, visit www.sacbee.com.

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