Skip to main content

Supreme Court Declines to Hear GSE Investors’ Case

Phil Hall
Feb 21, 2018
Swiss-based bank UBS’ announcement that the Department of Justice (DOJ) was preparing a civil action related to 40 residential mortgage-backed securities (RMBS) deals from 2006 through 2007 came to fruition sooner than later

The U.S. Supreme Court has declined to consider litigation brought by Fannie Mae and Freddie Mac shareholders that accused the government of overstepping its authority when redirecting the government-sponsored enterprises’ profits to the Treasury Department following the 2008 enactment of federal conservatorship.
 
According to a Reuters report, the justices’ decision leaves in place a 2017 U.S. Court of Appeals ruling stating that investors led by the now-defunct hedge fund Perry Capital could not pursue legal claims accusing the government in this case. That court said investors in Fannie Mae and Freddie Mac were able to continue the pursuit some damages claims, including for breach of contract.
 
The appeals court, in its ruling from last year, said the government gained its legal authority to channel Fannie Mae and Freddie Mac’s profits under a 2008 law that authorized the conservatorship.

 
Published
Feb 21, 2018
6 Federal Agencies Seek Comment On Proposed Rule For AVMs

The rule is intended to ensure the credibility and integrity of Automated Valuation Models.

FHA Proposes New Program To Help Struggling Homeowners

Legal expert questions whether agency has authority to implement the program.

Fitch Places Fannie, Freddie On Negative Ratings Watch

Ties credit rating to outcome of U.S. debt limit negotiations.

FHFA Director Strongly Defends New GSE Pricing Framework 

Tells House committee it’s “simply not true” that financially stronger borrowers are subsidizing others.

MBA CEO Criticizes Government Response To Economic Challenges

CEO Bob Broeksmit calls for sensible Regulation, clarity, and support for the mortgage industry.

Freddie Mac Updates Income Assessment Tool To Use Digital Pay Stubs

Says new capability helps lenders calculate borrower income more quickly and precisely.