After Freddie and Fannie were bailed out in 2008, hedge funds and distressed-equity investors began purchasing shares as many investors dumped stock. They stand to make a huge windfall if the companies are permitted to recapitalize.
More than $188 billion was injected into the two companies by the government to stabilize the giants and the mortgage industry. In 2012, the government began requiring the two send all profits to the Treasury as dividend payments.
The White House supports the new bipartisan legislation unveiled in March that would replace the companies with a new system of federal mortgage insurance.
The 60 Plus ads request that senators not force the legislation but allow investors in Fannie and Freddie the time to recover the investments “that are lawfully theirs.”
Supporters of the Johnson-Crapo legislation say that this $1.6 million campaign is a sign that well-off investors are becoming more organized.
“First they bring us an aggrieved Ralph Nader; then a fake grass-roots uprising,” said Jim Parrott, a former housing advisor for the Obama administration. “If the political system has a healthy bone left in its body, this increasingly strained campaign won’t work.”