We have reviewed the litigation filed late Friday by FHFA against seven securitizers. From a policy perspective, we note that FHFA predicates its claims on the assertion that the GSEs bought the subprime paper in “furtherance of their mission.”  This will play into the views of those who believe the mission doomed the missionaries.  But, of more immediate impact is the market impact of the litigation which we view as immediate and important even though the outcome of the court filing is years off.

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