Consumer activist Ralph Nader and a free-market group whose funders include billionaires Charles and David Koch are part of a growing crowd urging the Senate to preserve value for investors in Fannie Mae and Freddie Mac.
Bruce Berkowitz, the money manager battling the U.S. government over the future of Fannie Mae and Freddie Mac, is calling on the boards of the mortgage-finance giants to build capital instead of turning over their profits to the Treasury now that they’ve returned to profitability.
Fannie Mae and Freddie Mac would continue paying all of their profits to the Treasury for the next five years under bipartisan Senate legislation designed to wind down the U.S.-owned mortgage financiers and overhaul the government’s role in the housing market.
Bruce Berkowitz waited until financial-services stocks had more than doubled from their March 2009 lows before buying stakes now valued at more than $3 billion. The manager of the $16.5 billion Fairholme Fund said his bet wasn’t placed too late.
Fairholme Capital Management LLC, the mutual-fund firm run by Bruce Berkowitz, proposed buying two businesses that insure mortgage-backed securities from Fannie Mae and Freddie Mac to salvage a bet on the two government- backed companies.