Fannie and Freddie will likely keep $130B in profit from 2013

New York /
Feb.February 11, 2014 06:35 PM

The legal tug-of-war over the more than $130 billion that mortgage giants Fannie Mae and Freddie Mac made last year, all of which was handed over to the Treasury Department, is looking grim for the government. 

In 2012, the Treasury tweaked the terms of the bailout agreement it had with Fannie and Freddie when it seized the two companies on the verge of collapse, which increased the amount they paid out to seven times what they would have paid under the previous agreement, according to the Wall Street Journal.

Investors are betting that plaintiffs in the lawsuit who claim the money belongs to the companies will win the case. About 20 suits have been filed, but even a win might not mean a settlement for awhile.

“If investors are going to get any money out of this, it’s going to come out of the courts, and it’s going to take years,” David Felt, a lawyer who headed litigation with the Federal Housing Finance Agency, told the Journal. [WSJ] — Angela Hunt


Related Articles

arrow_forward_ios
New Fannie Mae and Freddie Mac restrictions mean higher mortgage rates for some. (Unsplash)
Mortgage rates on second homes rise as Fannie, Freddie pull back
Mortgage rates on second homes rise as Fannie, Freddie pull back
Meridian Capital Group CEO Ralph Herzka, Former Freddie Mac CEO David Brickman and  Barings CEO Mike Freno (Herza by Studio Scrivo; Brickman by Freddie Mac; Freno via Barings)
Ex-Freddie Mac boss looks to become top agency-backed CRE lender
Ex-Freddie Mac boss looks to become top agency-backed CRE lender
Former Freddie Mac CEO David Brickman and Meridian Capital Group CEO Ralph Herzka (Freddie Mac; Herza by Studio Scrivo)
Ex-Freddie Mac CEO launching lending platform with Meridian, Barings
Ex-Freddie Mac CEO launching lending platform with Meridian, Barings
Treasury Secretary Steven Mnuchin with Donald Trump. (Getty)
Treasury quits bid to privatize Fannie Mae, Freddie Mac
Treasury quits bid to privatize Fannie Mae, Freddie Mac
FHFA director Mark Calabria (Getty; iStock)
Federal housing agency extends forbearance options for multifamily landlords
Federal housing agency extends forbearance options for multifamily landlords
Future of Fannie, Freddie privatization is uncertain
Future of Fannie, Freddie privatization is uncertain
Future of Fannie, Freddie privatization is uncertain
(iStock)
Foreclosure filings are way down. There’s a reason
Foreclosure filings are way down. There’s a reason
How tough is Freddie when it comes to protecting landlords and tenants?
How tough is Freddie when it comes to protecting landlords and tenants?
How tough is Freddie when it comes to protecting landlords and tenants?
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...