Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) are back in the news again. A federal court has dismissed a lawsuit by a group of hedge funds and private equity managers claiming that Fannie Mae and Freddie Mac should share profits with their investors since the GSEs had allegedly breached the conservatorship agreement.
Stock crashes after court decision
The news of the dismissal caused a major slump in shares of the mortgage giants which had been moving up for the past two years on speculation that these legal complaints will find favor in the courts. Common shares of FNMA slumped to $1.7 today, down from $2.69 yesterday. Freddie Mac is...
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