Fannie Mae Stockholders: Fasten Your Seat Belts Please, Major Catalyst Is Approaching
Seeking Alpha, April 28, 2014 - April 28, 2014
April 28, 2014
Fannie Mae and Freddie Mac continue to be extremely interesting investments with asymmetric payoff profiles. News about the government-owned entities have been sparse lately, but both companies are facing a vital deadline which is likely to have extraordinary consequences for the share prices of both companies.
On April 29, 2014 a panel of the Senate Banking Committee will hold a markup hearing that will give vital clues to stockholders about how Capitol Hill will pursue the restructuring of the mortgage finance market (see here for legislative details of the Johnson/Crapo reform bill). The current proposal basically suggests a wind-down of the GSEs, which, naturally is not good news for common stockholders. Similarly, a bipartisan agreement on the reform proposal and on actual measures to push the reform bill through the House and the Senate are bad news for common shareholders.