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A House panel has asked the Federal Housing Finance Agency to explain why it hired outside counsel from Quinn Emanuel Urquhart & Sullivan and from Kasowitz Benson Torres & Friedman to file 17 lawsuits against financial institutions, and how much it is paying them. On September 29, Darrell Issa, chairman of the House Committee on Oversight and Government Reform, demanded the answers in a letter to Edward DeMarco, acting director of the FHFA [PDF]. (Issa is the California Republican who, in other instances, has called for attorney general Eric Holder’s impeachment, and has openly clashed with Lafe Solomon, the acting general counsel of the National Labor Relations Board.) Citing 2010 gross revenues at Quinn Emanuel of $550.5 million and at Kasowitz of $245 million, the letter notes “the work will not come cheap for American taxpayers.” Issa was responding to a September 2 announcement by the FHFA that it had filed the lawsuits against the institutions over the sale of certain mortgage-backed securities to Fannie Mae and Freddie Mac. The lawsuits seek to recoup “some portion of the losses that Fannie Mae and Freddie Mac incurred on private-label mortgage-backed securities that are attributable to misrepresentations and other improper actions by the institutions named in the suits.” Issa’s letter says that while the suits don’t specify a damage amount, analysts have predicted as much as $60 billion could be recouped. Critics, mostly Republicans, have said these and other suits could harm banks that are struggling back from near collapse and could cost the country jobs. Quinn Emanuel had already filed a number of similar suits against Bank of America, Merrill Lynch, and other institutions on behalf of various plaintiffs. The Issa letter notes that Quinn Emanuel chose not to represent banks during the financial crisis so that it would be in the best position to represent plaintiffs against the financial institutions. It also notes that the FHFA has not made public the terms of its outside counsel arrangement. FHFA general counsel Alfred Pollard didn’t immediately return calls for comment, but FHFA spokesperson Stefanie Johnson told us, “We have received the letter and will be responding to their requests.” The letter states “it is not clear why FHFA retained private law firms to bring lawsuits against these financial institutions,” rather than use government lawyers. It also points out that Fannie and Freddie continue to operate in a government conservatorship, due to their major losses during the financial crisis.

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