Investor appeals ruling over Fannie, Freddie profits

by Ryan Smith03 Oct 2014
An investor in Fannie Mae and Freddie Mac is appealing a recent ruling dismissing claims that the government lacked the authority to seize the mortgage finance companies’ profits.

Perry Capital LLC was one of several investors that sued the government for what they called an illegal seizure of dividends by the government, according to a Reuters report. Fannie and Freddie were put into government conservatorship in 2008. Under the terms of the deal, the companies turn over their profits to the Treasury as dividends – even though they have paid back the $187.5 billion cash infusion given to them by the government.

Perry’s lawsuit argued that ““blatant overreach by the federal government to seize all of the companies' profits at the expense of the companies and all of their private investors is unlawful and must be stopped.” But the court dismissed the suit, saying that unambiguous provisions of the Housing and Economic Recovery Act allowed the government to seize the companies’ profits.

But Perry Capital has said it will request a review of the ruling in federal appeals court.

“The district court’s decision overlooks important points of law and improperly resolved key questions of fact,” Theodore B. Olson, Perry Capital’s attorney, told Reuters. “The merits of this case deserve to be heard in court.”

COMMENTS

Poll

Is TILA-RESPA a good or bad thing long term?