New Acts in GSE Drama Taking Stage


Posted To: MND NewsWire

There has been a lot of recent activity regarding the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac swirling around and reported only in bits and pieces. Most is linked in some respect to the so-called “net worth sweeps” in which the profits of the two GSE’s, less a diminishing buffer reserve must be paid to the U.S. Treasury each quarter in the form of a dividend. This requirement was put in place in August 2012 as an amendment to the original Senior Preferred Stock Agreement (SPSA) between Treasury, the Federal Housing Finance Agency (FHFA), and the GSEs which required only a specified dividend. The Legal Issues First, several lawsuits filed by stockholders challenging the sweeps are still working their way through the courts. The plaintiffs are largely hedge funds who…(read more)

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