A Huge Blow to GSE Shareholders: Federal Judge Dismisses Profit ‘Sweep’ Lawsuit
- October 2, 2014
Inside Mortgage Finance, By Charles Wisniowski
In a surprise ruling late Tuesday, a federal judge in Washington dismissed GSE shareholder claims against the federal government challenging the Treasury Department’s 2012 “net-worth sweep” of nearly all the profits generated by Fannie Mae and Freddie Mac.
Judge Royce Lamberth of the U.S. District Court for the District of Columbia ruled that both the Treasury Department and the Federal Housing Finance Agency are empowered by the Housing and Economic Recovery Act of 2008 to execute the “Third Amendment” of the Preferred Stock Purchase Agreement.