Precy Dumlao, Opalesque Asia:
A group of investors led by hedge fund Perry Capital sued the Federal government for allegedly seizing all profits from the bailed-out mortgage finance companies and Fannie Mae and Freddie Mac saying the move destroyed investors’ holdings, various media reported.
According to The Journal, the lawsuit was filed Sunday in Washington in which Perry Capital accused the Treasury Department and Federal Housing Finance Agency of violating the terms of the 2008 bailout agreement with the failed mortgage companies after it decided in August last year to capture all profits.
Perry Capital, which started its position in Fannie Mae and Freddie Mac in 2010, wants the Federal government to recall the decision. It said that the bailout agreement did not provide specific mechanism for the two firms to repay the $187.5bn in bailout fund the government extended in 2008 to rescue the then ailing firms.
The report added that another group of investors have filed a much larger lawsuit against the government’s 2008 seizure of the two firms.
The recovering housing market in the U.S. resuscitated Freddie Mac’s and Fannie Mae’s fortunes that investors have been piling up to retain their investments.
As the two firms returned to making money, they had already paid $132bn in dividends as at end June this year, reported ......................
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