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Fannie Mae Stockholders: Fasten Your Seat Belts Please, Major Catalyst Is Approaching

Seeking Alpha

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.

View full article: Fannie Mae Stockholders: Fasten Your Seat Belts Please, Major Catalyst Is Approaching