Peekaboo Fannie Mae, Freddie Mac Accounting May Have Helped Circumvent Fifth Amendment
ValueWalk - August 11, 2015 - August 12, 2015
By Glen Bradford
Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) are run like they are government agencies. Overseen by the Federal Housing Finance Agency who have put them into conservatorship, these government sponsored enterprises historically support American home affordability. After writing about the GSEs and owning the common securities for over a year I have instead moved into preferred shares and this article is an explanation why.
According to the FHFA and US Treasury, the government all but owns the companies. With the third amendment net worth sweep in place since 2012 the net worth of Fannie Mae and Freddie Mac belongs to US Treasury and FHFA runs them. Even though the government runs them and they take all their money forever, but they are still private shareholder owned companies. Yes, you read that right.
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