Why Fannie Mae (FNMA), Freddie Mac (FMCC) Are Higher On Monday

NEW YORK (TheStreet) -- Shares of Fannie Mae (FNMA) and Freddie Mac  (FMCC) are both higher this afternoon, up 8.12% to 3.86, and up 7.32% to 3.81, respectively.

Earlier today it was announced that Bill Ackman's firm, Pershing Square Capital Management, is increasing its stake in Fannie Mae and Freddie Mac to over 11% in each from a combined 9.8% in both firms, according to a CNBC report.

The activist investor's move comes after the Senate Banking Committee announced agreement on legislation to wind down the mortgage financiers. Ackman thinks otherwise and that a wind down is less likely now.

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The bill would leave a decision on how to treat their private shareholders to the courts. Its authors, South Dakota Democrat Tim Johnson and Republican Mike Crapo of Idaho, would replace the companies with a new industry financed agency. 

Fannie and Freddie are now profitable and by the end of this month will have sent the Treasury Department $202.9 billion in dividends, CNBC reported.

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