For several years, subsequent "draws" on the Treasury by the GSEs were in great part used to cover dividends on the government's preferred shares. Yes, the GSEs were borrowing from the government to pay the government.
Then in August 2012, the government stopped playing the dividend game with the GSEs, and simply required them to pay all income over to the Treasury as dividends, less a minimal $3 billion capital buffer for each GSE.
But the weakest part of the complaint is that following their placement into conservatorship, the government used Fannie and Freddie "as a vehicle to restore investor confidence in the mortgage market by providing a mechanism for other financial institutions to unload their bad mortgage debts." There are no numbers backing up this claim, in the complaint.
The shareholders in the complaint go on to quote Fannie Mae alone in saying the company "provided approximately $2.3 trillion in liquidity to the mortgage market in 2009 through 2011 through
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