Saturday, 28 May 2016
Last updated 1 day ago
Apr 9 2014 | 9:47am ET
The newly formed Coalition for Mortgage Security is sticking up for the rights of Fannie Mae and Freddie Mac shareholders.
The group, which describes itself as bipartisan and grass roots, echoes the arguments of hedge funds like Fairholme Capital Management and Perry Capital which have launched lawsuits over the value of their shares in Fannie and Freddie's preferred stock.
The Coalition, which has tapped former senior U.S. housing official Ken Blackwell as director, declined to comment on its financial backers, reports Reuters.
At issue is the Treasury's move earlier this year to amend the terms of the lenders' $187.5 billion bailout. Prior to the so-called third amendment, the government was paid a fixed 10% dividend on its stake in Fannie and Freddie. Under the new terms, the Treasury gets all of the companies' quarterly profits until the bailout is paid out.
As the Senate Banking Committee prepares to consider a proposal to overhaul the housing finance market, the Coalition says it is "committed to reforming our housing finance system in a way that benefits and fairly treats current and future homeowners, taxpayers, and investors across the country."