Fannie Mae, Freddie Mac Deal Raises Troubling Issues

When the US Senate Banking Committee announced plans to replace Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) with a new government backed program, shares of the stocks dropped dramatically, down nearly 15% on Wednesday and off more than 30% the day previous as rumors had been swirling.  While the measure had bipartisan participation from the Obama administration, the bill’s passage is uncertain.  If it does pass, Congress must then decide on “fair” treatment for investors.

The bill might not get attention before political leaders start to consider elections,...