Most people are aware of the ongoing legal battle waged by Fannie Mae and Freddie Mac shareholders against the U.S. government. But the lawsuit also has broader implications for consumers that have thus far gone unacknowledged.
In the midst of the housing crisis, the two government-sponsored enterprises were placed into conservatorship under terms outlined in the Housing and Economic Recovery Act of 2008. This agreement allowed the entities to access Treasury funding and therefore continue providing liquidity to the mortgage market. In exchange, the government acquired a 79% ownership stake in the GSEs by way of purchasing common shares.Posted: Sep 7, 2015