Fannie, Freddie Wind-Up Bill Garners Paltry Support

May 16 2014 | 10:21am ET

Plans to shut down Fannie Mae and Freddie Mac—plans strongly opposed by their hedge fund shareholders—moved forward yesterday, but seems unlikely to go any further this year.

The Senate Banking Committee yesterday approved a measure that would wind the two government-backed mortgage giants down and replace them with a system of privately-financed mortgage insurers. But it did so with the support of only half the Democrats on the panel, making it unlikely that it will face a floor vote before the November elections.

And that makes it more likely that Fannie and Freddie will be restructured, rather than disposed of—a resolution pushed by Fairholme Capital Management and Pershing Square Capital Management.

During the financial crisis, the federal government took over Fannie and Freddie, providing the firms with $188 billion in bailout funds. That has led congressional leaders of both parties as well as the White House to favor their replacement with a system that puts fewer taxpayer dollars at risk.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note