Why Hedge Funds Suing The Government Over Fannie And Freddie Have A Bad Case

Why Hedge Funds Suing The Government Over Fannie And Freddie Have A Bad Case

With the housing market collapsing in July 2008, President George W. Bush signed the Housing and Economic Recovery Act into law, 260 pages aimed at bolstering mortgage giants Fannie Mae andFreddie Mac and overhauling the regulations of these government-sponsored entities that were crashing. The law created the Federal Housing Finance Agency and gave it the authority to place Fannie Mae and Freddie Mac into conservatorship and regulate the GSEs. A few weeks after Bush signed the law, the FHFA placed Fannie Mae and Freddie Mac into conservatorship and the Treasury Department started to inject $188 billion into the GSEs in return for senior preferred stock.

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