An appeals court late Friday reversed an earlier ruling which had backed the government’s taking all of Fannie Mae’s (OTCQB:FNMA +22.9%) and Freddie Mac’s (OTCQB:FMCC +21.4%) profits.
“The result adds a sense of urgency to recognize that the GSEs have repaid the government, move toward a recapitalization plan to formalize operational restrictions, and increases the likelihood of the GSEs receiving compensation for their overpayment of the original terms of the PSPA,” writes Compass Point, upgrading the stocks to Buy from Neutral.
Speaking this morning, Treasury Secretary Mnuchin says he expects to soon have an agreement allowing Fannie and Freddie to begin retaining earnings.
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