Fairholme Capital Management founder is looking to have profits from Fannie Mae – Federal National Mortgage Association (OTCBB:FNMA) returned to its shareholders. Bruce Berkowitz is a holder of Fannie Mae preferred shares. With the government reaping a $60 billion dividend from the lender this year, and the five-year anniversary of the bailout marked this week, Berkowitz thinks now is the time to return control of the company to shareholders.

Fannie Mae

Berkowitz fund is suing the government in order to reverse a 2012 decision that took dividends from Fannie Mae away from its public shareholders and sent the company’s profits directly to the U.S. Treasury. Berkowitz doesn’t think that decision was the right one. In an interview with CNBC today he stated, “we’re property owners and this is America.”

Fannie Mae shareholder control

Fannie Mae – Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac – Federal Home Loan Mortgage Corp (OTCBB:FMCC) are Government Sponsored Enterprises. That means that though they are owned by private shareholders, they have a charter to perform specific tasks from the government of the United States. That charter had what was considered an implicit guarantee on the companies’ debt. that implicit guarantee became explicit when the Federal government stepped in and saved the lenders in 2008.

Now that Freddie Mac and Fannie Mae are back, and making outsized profits, it’s time to return control of them to their shareholders. His plan to regain control of— and the value of his investment in—Fannie Mae is facing resistance in Congress, however. Berkowitz wants to see tax payers compensated for their investment in the lenders, but the government appears to have more wide-reaching plans for Fannie Mae.

Congressional plans

Congress appears to want to shut down Fannie Mae for good, with Barack Obama explicitly asking the Congress to abolish the institution in order to protect the American taxpayer from downturns in the property market. Congress seems to be generally in favor of the change, but there are roadblocks ahead.

The problem with plans to close the lender lies in the structural importance of Fannie Mae – Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac – Federal Home Loan Mortgage Corp (OTCBB:FMCC), who currently own or guarantee half of all U.S. mortgages and back nearly 90 percent of new mortgages. The structural importance of the banks and the protection of property rights in the constitution form the basis of Berkowitz’s hope for a resolution.

The Fannie Mae and Freddie Mac cases will rage on, and the outcome of the court battle between Fairholme and the government will have a resounding effect on the future of lending in the United States.