The FHFA's efforts could ultimately lead to a settlement that would avoid protracted legal battles, analysts said.
"There's going to be much more incentive to negotiate seriously and quickly than if they had done this seven months ago, when people were blithely ignoring the fraud," says William K. Black, a former federal bank regulator who is now an associate professor at the University of Missouri-Kansas City School of Law.
Estimates about banks' ultimate exposure vary considerably because it isn't clear how aggressively investors will pursue claims, or how successful they will be. Banks could face between $55 billion and $179 billion in repurchase demands from investors, according to Compass Point Research & Trading, a Washington boutique investment bank. Estimates from FBR Capital Markets say repurchase demands could be lower, between $24 billion and $51 billion.
The FHFA subpoenas could mark the beginning of a new attempt to recover losses on soured mortgages from banks.
And what these means for private investors
If the FHFA is successful in proving that loan files didn't meet underwriting standards or that their ownership chain wasn't properly transferred during the securitization process, that could pave the way for other investors to make similar challenges, said Joshua Rosner of investment-research firm Graham Fisher & Co.
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