An Overview of the Fannie and Freddie Conservatorship Litigation

22 Pages Posted: 21 Mar 2014 Last revised: 18 Oct 2014

David J. Reiss

Brooklyn Law School

Date Written: March 17, 2014

Abstract

The fate of Fannie Mae and Freddie Mac are subject to the vagaries of politics, regulation, public opinion, the economy, and not least of all the numerous cases that have been filed in 2013 against various government entities arising from the placement of the two companies into conservatorship. This short article will provide an overview of the last of these. The litigation surrounding Fannie and Freddie’s conservatorship raises all sorts of issues about the federal government’s involvement in housing finance. These issues are worth setting forth as the proper role of these two companies in the housing finance system is still very much up in the air. The plaintiffs, in the main, argue that the federal government has breached its duties to preferred shareholders, common shareholders, and potential beneficiaries of a housing trust fund authorized by the same statute that authorized their conservatorships. At this early stage, it appears that the plaintiffs have a tough row to hoe.

Keywords: Fannie Mae, Freddie Mac, government-sponsored enterprise, gse, Federal Housing Finance Agency, FHFA, mortgage market, conforming, Perry Capital, Fairholme Funds, Treasury, United States, Samuels, HERA, Housing and Economic Recovery Act of 2008, OFHEO, Office of Federal Housing Enterprise Oversight

Suggested Citation

Reiss, David J., An Overview of the Fannie and Freddie Conservatorship Litigation (March 17, 2014). New York University Journal of Law and Business, Vol. 10:2, No. 101, 2014; Brooklyn Law School, Legal Studies Paper No. 370. Available at SSRN: https://ssrn.com/abstract=2410497

David J. Reiss (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

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