FHFA Ruled Unconstitutional, but Net Sweep Prevails


Posted To: MND NewsWire

Yet another federal court has rebuffed shareholders hoping to recover some value from their investments in the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. A three-judge panel for the Fifth Circuit (Texas) Court of Appeals refused to stop the practice of net worth sweeps required of the GSEs, but, the plaintiffs, whether their intention or not, did succeed in getting the structure of the Federal Housing Finance Agency (FHFA) ruled unconstitutional. FHFA v Collins was an appeal of a suit filed by GSE stockholders J. Patrick Collins, Marcus J. Liotta, and William M. Hitchcock in October 2016. It was the latest in a long stream of lawsuits against the government regarding its 2008 seizure of the GSEs. The original suit named FHFA and its current director Melvin H. Watt and…(read more)

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