This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fannie Freddie Kill Bill Already Struggling

NEW YORK (TheStreet) --Legislation expected soon that would wind down Fannie Mae (FNMA) and Freddie Mac (FMCC) is running into resistance from both the left and the right before it has even been completed.

Politico reports that Senators Elizabeth Warren (D., Mass.) and Sherrod Brown (D., Ohio) both consider the deal between Mike Crapo (R., Idaho) and Tim Johnson (D., S.D.) to be a "non-starter" and that Senate Majority Leader Harry Reid (D., Nev.) is wary of anything that might slow the fragile recovery in his home state. 

Warren certainly didn't sound enthusiastic about the deal in remarks she made at a conference Thursday hosted by the National Community Reinvestment Coalition that were reported by American Banker.

"Housing finance reform was too important to rush a committee deal on, and in my view, it's also too important to rush a markup on. We should have a full, open discussion before we decide to set out on a new path," she said. 

As for Reid, he had already made his objections known in August when President Obama was in Phoenix talking about winding down Fannie and Freddie.

Republican opposition also appears plausible as Sen. Pat Toomey (R., Pa.)submitted a strongly-worded Question For the Record to Treasury Secretary Jack Lew on Friday, though his office later conceded to me it misidentified the York County pension fund as a shareholder in Fannie and Freddie and will be revised. Toomey hasn't yet made clear his views on the bill, however, noting, as Warren did Thursday, that he is awaiting its final language. 

Common and preferred shares of Fannie and Freddie sold off sharply Tuesday after the Crapo-Johnson deal was announced, but have regained some of those losses. Fannie common shares were up 7.93% to $4.09 early Friday afternoon, while Freddie Mac common shares were up 8.72% to $3.99. Before Tuesday's selloff, the shares were at multi-year highs of $6 for Freddie and $6.35 for Fannie.

--Written by Dan Freed in New York

Must Read: Senator Stumbles in Fannie and Freddie Shareholder Defense

Follow @dan_freed

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FNMA $1.77 2.91%
FMCC $1.57 -0.63%
AAPL $93.21 -0.44%
FB $117.80 -0.22%
GOOG $701.26 0.80%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs