Government Restricting Returns To Fannie Mae, Freddie Mac Shareholders

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Government Restricting Returns To Fannie Mae, Freddie Mac Shareholders

Fannie Mae

Photo by NCinDC

Investors in Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) common stock may have had their fate sealed on December 20, 2010.  This is when, unknown to investors, a memo to then-Treasury Secretary Timothy Geithner from the Treasury Department’s Under Secretary for Domestic Finance Jeffrey Goldstein placed restrictions on shareholders receiving earnings from the troubled firms.

Fannie Mae, Freddie Mac: Government not following disclosure rules

That the government would limit a shareholder’s earnings is unusual, but even more eye-opening is the failure to disclose this material information to shareholders, none of which was disclosed in financial filings of Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA), an interesting tidbit first published by Gretchen Morgenson in the New York Times.

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