DOW JONES NEWSWIRES First Horizon National Corp. (FHN) disclosed it has been subpoenaed by "the conservator for two" government-sponsored enterprises related to six securitizations of loans as Fannie Mae (FNMA) and Freddie Mac (FMCC) continue to look for potential misdeeds in loans they bought. Shares of First Horizon fell on the disclosure and were recently off 3.4% at $9.74. The stock is down 24% this year after rising more than one-third in 2009 and despite continued credit-quality improvement. The Tennessee-based bank said in its third-quarter report, filed Monday with the Securities and Exchange Commission, that the matter involves the securitizations' representations and warranties and whether or not they were breached. More institutional investors are joining efforts to recover losses on mortgage portfolios amid concerns about sloppy mortgage servicing and underwriting practices. First Horizon said it "is unable to estimate any liability for this matter. At the time this report is filed, FHN was a defendant in lawsuits by three investors in securitizations which claim that the offering documents under which certificates were sold to them were materially deficient. Although these suits are in very early stages, FHN intends to defend itself vigorously." It added it had not reserved any money as of Sept. 30 "for exposure for repurchase of loans arising from claims that FHN breached its representations and warranties made at closing, nor for exposure for investment rescission or damages arising from claims by investors that the offering documents under which the loans were securitized were materially deficient." -By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com
