Attorneys for a former Fannie Mae executive suing the mortgage giant for wrongful termination are challenging the Federal Housing Finance Agency's effort to join the case, characterizing the move in a filing today as "a bad faith delaying tactic."
The FHFA, according to its motion to intervene (PDF), wants to help Fannie Mae sort out whether it should be considered a federal actor or a private corporation in the case. U.S. District Court Judge Rosemary Collyer has previously told Fannie Mae that it had “confused” its legal arguments on the issue and set aside the first phase of discovery to resolve Fannie Mae’s status.
Former Fannie Mae vice president Caroline Herron, who left Fannie Mae in 2007 but returned as a consultant in 2009, has accused officials of firing her for reporting on what she has characterized as questionable practices in Fannie Mae’s handling of Treasury’s Homeownership Preservation Program.
Fannie Mae has denied any wrongdoing and claims the suit is retaliation for Fannie Mae’s refusal to help Herron get a job at Treasury.
Herron sued in U.S. District Court for the District of Columbia in June 2010. In a motion (PDF) filed today contesting the FHFA’s involvement, Herron argues that the agency waited too long to get involved.
“Although FHFA has known of Ms. Herron’s allegations since March or April of 2010, and has known of this lawsuit since the time it was served on Fannie Mae in June 2010, FHFA waited nearly one year to intervene in this case,” Herron’s counsel argued in the filing.
Herron is being represented by Washington’s Bernabei & Wachtel. Bernabei partner Alan Kabat declined to elaborate beyond the brief, except to say that he looks forward to discussing the issue at a status hearing scheduled for May 23.
The FHFA, through a spokeswoman, declined to comment. The agency is being represented by Michael Johnson of Washington’s Arnold & Porter, who referred questions about the case to the agency.
Created by Congress in 2008 to monitor Fannie Mae and Freddie Mac after the housing market collapsed, the agency, according to its motion, has statutory authority to intervene in litigation involving the government-sponsored enterprises.
According to the FHFA’s filing, Fannie Mae is supporting the move. Fannie Mae has declined to comment on the case, and its attorney, Ira Kasdan of Washington’s Kelley Drye & Warren, did not immediately return a request today for comment.