A new organization is in favor of winding down Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) without harming the shareholders of the bailed-out mortgage companies.

The new tax-exempt group calling itself the Coalition for Mortgage Security joins a few other groups that have sprung forward to defend shareholders.

Responsible wind-down

Last month, US Senators Tim Johnson (D., S.D.) and Mike Crapo (R., Idaho) made a new proposal for reforming the US mortgage industry that falls in line with last year’s proposal from Bob Corker (R., Tenn.) and Mark Warner (D., Va.), but getting bipartisan support could be a major problem.

The proposal would set up a system of private companies that release a common security, much like Fannie Mae / Federal National Mortgage Association (OTCBB:FNMA) / and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) sell securitized mortgages under the current system.

On Monday, the new group said it would campaign for legislation that protects the rights of investors in the bailed-out mortgage-finance companies. The language used in its website obscures a fundamental disagreement: the group doesn’t support the Senate bill offered last month by Johnson-Crapo which would enshrine the Obama administration’s 2012 policy to prevent the firms from recapitalizing themselves.

Joins other advocacy groups

The Coalition for Mortgage Security group named as its director Ken Blackwell, a Republican politician who served as Ohio’s state treasurer and secretary of state.  He said the group didn’t support the Johnson-Crapo bill, which the Senate Banking Committee is set to vote on as soon as April 29.

Last week, a conservative seniors group, the 60 Plus Association, began a $1.6 million television and radio advertising campaign against the Johnson-Crapo bill, targeting seven senators that have voiced support for a housing-finance overhaul.

Earlier, Ralph Nader, working with Shareholder Respect (a lobbying organization advocating a return to shareholder ownership of the GSEs) has been supporting a group called Restore Fannie Mae, which advocates “an end to the unconstitutional conservatorship of Fannie Mae and Freddie Mac by the U.S. government”.

A few large investors have invested in the GSE’s common and preferred shares. In November, Bruce Berkowitz-led Fairholme Capital Management had offered to buy the insurance businesses of the GSEs by infusing $52 billion of fresh capital in the GSEs. Fairholme indicated that it would lead a group of private investors that included Perry Capital.

Under a change in their bailout terms imposed by the government in 2012, the GSEs are required to sweep their entire profits into the U.S. Treasury, though earlier they had been required only to pay a dividend of 10% to the government for its controlling stake. A number of private investors, including hedge funds Paulson & Co and Perry Capital LLC have sued over the change.