Fannie Mae-No Politics (FNMA)

[cooler_heads]

Fannie and Freddie Shareholders Strike Back

http://blogs.wsj.com/moneybeat/2014/10/20/fannie-and-freddie-shareholders-strike-back/?mod=yahoo_hs

A Fannie Mae FNMA +5.09% and Freddie Mac FMCC +1.45% shareholder suing the government filed a brief in federal court in Iowa Monday arguing a federal judge in Washington, D.C. reached the wrong decision when he dismissed a similar case last month.

The filing marks the first time lawyers for plaintiffs in various Fannie and Freddie lawsuits have responded in detail to Judge Royce C. Lamberth’s decision. The Iowa case was brought by Continental Western Insurance Co, which is represented by the same law firm—Cooper & Kirk, PLLC—that represented Fairholme Funds in its case before Judge Lamberth.

The latest filing argues Judge Lamberth erred by allowing the Federal Housing Finance Agency more discretion in its role as a conservator than the law allows. The filing also says the court misread the requirement that Fannie and Freddie pay dividends to the U.S. Treasury. And it asks the Iowa court to give the Lamberth decision “no weight.”

Given that Fannie and Freddie’s shares plummeted in the wake of that decision, investors think it certainly has heft.