Banking Law News

Fannie-Freddie Investors Fighting Profit Sweep Get Key Win (2)

Sept. 7, 2019, 12:07 AM

Fannie Mae and Freddie Mac investors won a big victory in their long battle to reap benefits from their stakes in the mortgage giants with a court ruling letting them pursue claims that the U.S. sweep of the companies’ earnings is illegal.

A panel of federal appeals court judges in New Orleans overturned a ruling that backed the government’s right to take all of the mortgage giants’ profits. The judges also concluded that the structure of Fannie and Freddie’s regulator, the Federal Housing Finance Agency, is unconstitutional because of job protections for the agency’s director.

“Congress created FHFA amid...

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