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April 8, 2014

In Washington, Friends of Fannie, Freddie Are Multiplying

“Investors in Fannie Mae and Freddie Mac appear to be building a more vocal and organized support network in Washington weeks ahead of a key Senate vote to consider legislation that would overhaul the companies.

“On Monday, a new tax-exempt group calling itself the Coalition for Mortgage Security said it would campaign for legislation that protects the rights of investors in the bailed-out mortgage-finance companies. The group echoed the position of many hedge funds and other investors that are suing the government over its oversight of the companies, arguing that changes to their government bailout agreements violated property rights.

“The group, which isn’t identifying any of its members or donors, uses language on its website that is strikingly similar to the Obama administration and Senate lawmakers who are advancing a bipartisan bill to a committee vote later this month. The group says it wants a bill that “responsibly winds down Fannie Mae and Freddie Mac.”

“But that language obscures a fundamental disagreement: the group doesn’t support the Senate bill, offered last month by Sens. Tim Johnson (D., S.D.) and Mike Crapo (R., Idaho), which would enshrine the Obama administration’s 2012 policy to prevent the firms from recapitalizing themselves.”

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Read full Wall Street Journal article here.

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