Fannie Mae-No Politics (FNMA)

[observer21]

Price of Fannie/Freddie Common Up 35 Percent Since Summer. Credit the RNC?

By Paul Muolo
[e-mail]
Since early July, Fannie Mae and Freddie Mac have seen the share price of their common stock rise roughly 35 percent on the over-the-counter market, turning these two government wards into some of the best short-term investments among all equities.
Then again, there appears to be no real reason for the run-up in trading price, though observers speculate that a Republican National Committee resolution issued earlier in the year regarding the two might have something to do with it. In that document – entitled “Resolution on Protecting Taxpayers by Restoring Safety and Soundness to Government-Sponsored Enterprises” – Republicans point out that the Treasury Department has recouped its entire investment in Fannie and Freddie and then some.
But more importantly, the document states that the RNC “recognizes the sanctity of property rights in America and acknowledges the need to resolve the outstanding claims of Fannie Mae and Freddie Mac shareholders in a manner that honors and respects the rule of law governing the rights of corporate stockholders.”
The latter statement gave hope to the 30-plus plaintiffs that have sued the Treasury Department (and other government bodies) over a change made back in 2012 to the preferred stock purchase agreements. For the full story, see the new edition of Inside Mortgage Finance, now available online.