(Image Source: WingWire)  

BY CHARLES MCKEAGUE

ANCHOR LAUREN GORES

Housing giants Freddie Mac and Fannie Mae are getting wacked by the SEC.  A bombshell out of Washington early Friday morning – the SEC is filing charges against the two former CEO’s and other high ranking executives.  Here’s MSNBC and CNN with the latest.

“According to the Securities and Exchange Commission, six execs will face charges for making misleading statements. (MSNBC)

“Securities and Exchange commission wants them to pay financial penalties.  Freddie Mac, Fannie Mae play a major role in the housing market.  They also got the biggest bailout during the financial crisis.” (CNN)

The news was allegedly broken by Peter Barnes from the Fox Business Network.  He says the charges basically state– not only did the company expose itself to bad sub-prime mortgages – but they reportedly lied so they could acquire more.

“The company made a lot of money on these sub-prime mortgages, the stock went up. These executives made lots of money.  But now the SEC suing them now saying they defrauded investors here. They say Fannie and Freddie executives told the world that their sub-prime exposure was substantially smaller than it really was.” (Fox News)

Bloomberg has more from the SEC’s lawsuits – showing that the alleged misstatement by Freddie Mac could be very significant.

“In the lawsuits, the SEC said Syron, Mudd and others understated the lenders’ exposure to subprime mortgage loans. From 2007 to 2008, Freddie Mac executives said the company’s exposure was between $2 billion and $6 billion when it was actually as high as $244 billion, according to one SEC complaint.”

The Wall Street Journal brings an excerpt from the actual lawsuit – in which the SEC promises to hold all those responsible - accountable.

"These material misstatements occurred during a time of acute investor interest in financial institutions' exposure to subprime loans, and misled the market about the amount of risk on the company's books. All individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country's investors."

And from Forbes – other companies have been hit by the SEC for doing the same thing.  Forbes says in the past 5 or so years – the mortgage market has been all big and all bad.

“The SEC has wrung settlements out of a number of other institutions related to controversial securities deals tied to the mortgage market, including Bank of America, Goldman Sachs Group and more recently a $285 million deal with Citigroup…”

Stay tuned to Newsy’s mobile apps as we’ll update you with more news – as it breaks.  Click here to read the full SEC lawsuit .