Fannie Mae-No Politics (FNMA)

[jacklanvo99]

A decision by the 9th Circuit Court of Appeals yesterday could have big implications for a Delaware case where plaintiffs are arguing that Fannie Mae and Freddie Mac are Delaware corporations and therefore are subject to state, not federal law.

Because Delaware law doesn't allow for the net worth sweep of Fannie and Freddie profits, if the GSEs are ruled to be private companies, that profit sweep would be illegal. The 9th Circuit seems to be saying just that in a decision that upheld a district court finding.

"The district court properly held that a claim presented to Fannie Mae or Freddie Mac is not presented to an 'officer, employee or agent' of the United States. And that’s because Fannie Mae and Freddie Mac are private companies, albeit companies sponsored or chartered by the federal government," the ruling from the 9th Circuit stated.

http://www.housingwire.com/articles/36442-fanniegate-9th-circuit-rules-that-fannie-and-freddie-are-private-companies