Fannie Mae-No Politics (FNMA)

[navycmdr]

$Why $Fannie $Mae $Stock $Was $Up $Big $Today

By Dave Kovaleski – Aug 16, 2023 at 3:05PM

https://www.fool.com/investing/2023/08/16/why-fannie-mae-stock-was-up-big-today/

Fannie Mae, or the Federal National Mortgage Association, got a boost when shareholders
prevailed in a lawsuit. A federal grand jury awarded shareholders $612 million in the case.

OTC: FNMA Federal National Mortgage Association
Market Cap $707M
Today's Change (22.02%) $0.11
Current Price $0.61
Price as of August 16, 2023, 2:59 p.m. ET

The stock saw a double-digit jump.

What happened

Shares of the Federal National Mortgage Association (FNMA 22.02%) were surging on Wednesday,
up about 18.8% as of 2:15 p.m. ET. The over-the-counter (OTC) security, also known as Fannie Mae,
is trading at around $0.59 per share and is up some 68% year to date.

So what

Federal National Mortgage Association, or Fannie Mae, is a government-sponsored entity that acquires
mortgage loans from smaller banks or credit unions and guarantees these loans for low- to
median-income borrowers on the secondary market.

OTC: FNMA Federal National Mortgage Association
Today's Change (22.02%) $0.11
Current Price $0.61
52wk Range $0.35 - $0.64

Volume 12,830,231
Avg Vol 1,695,305

The stock surged on Wednesday, likely on the news that a federal grand jury awarded shareholders
$612 million in a lawsuit they filed against the Federal Housing Finance Agency (FHFA).

The shareholders claimed that the FHFA improperly amended stock purchase agreements in 2012
to sweep all the profits from Fannie Mae and its brother organization Freddie Mac, or the Federal
Home Loan Mortgage Corp. (FMCC 19.05%) to the U.S. Treasury.

The shareholders in the case, Berkley Insurance Co., et al., vs. the Federal Housing Finance Authority,
et al., initially sought $1.6 billion, but was awarded $612.4 million by the jury, split fairly evenly between
Fannie Mae and Freddie Mac.

OTC: FMCC Federal Home Loan Mortgage
Today's Change (19.05%) $0.10
Current Price $0.60

The government deserved and would have received, without the net worth sweep, a huge profit on its
investment. But it was not entitled to 100% of all profits forever. That was not the deal made in
September 2008. Private preferred shareholders invested over $32 billion, of which $20 billion was
at the behest of government regulators during the housing crisis years of 2007 and 2008," lead attorney
for the shareholders, Hamish Hume with Boies Schiller Flexner, said, reported National Mortgage Professional.

Now what

So, while it was a good day for Fannie Mae and Freddie Mac shareholders, keep in mind that these are
OTC penny stocks that don't trade on the major exchanges. As such, they are volatile and prone to
wild swings, as we've seen in recent years.

Also, the housing market is still struggling, with high interest rates and low supply. That said, the outlook
is improving, and Fannie Mae saw a 7% year-over-year increase in net income in the second quarter to
$5 billion. After a couple of brutal years the past two years, it might still have a little more bounce in it.
But long-term, you can expect volatility.