This, of course , has foiled the hopes of shareholders who held on to their stock through these years with the expectation that the agencies will be allowed to return to private hands much like other bailed out companies such as AIG (AIG). Former presidential candidate Ralph Nader is one among them.
The amendment came as a further blow to some hedge funds including Paulson & Co., Perry Capital and Akanthos Capital, who piled into the junior preferred shares of the agencies in 2010 when they were trading for pennies on the dollar on a bet that the shares would recover in value once the companies became profitable again and repaid the government.
Shareholders, including Perry Capital and Fairholme Capital's Bruce Berkowitz have challenged the legality of both the takeover and the amendment and remain optimistic.
"Fannie Mae and Freddie Mac have accomplished their mission. They did it. Mission Impossible accomplished," Berkowitz told CNBC on Wednesday. "It is time for them to be resuscitated, rehabilitated and to let equity build in these companies and prepare for the next rainy day.Preferred shares of both the agencies have zoomed over the past year. But these investors have few sympathetic ears in Congress. Right now there are two proposals on mortgage finance reform that have vastly different solutions, but they agree on one thing. Fannie and Freddie must die.