Fannie Mae and Freddie Mac shareholders have lost another court decision in their efforts to overturn an agreement that allows the Treasury Department to capture most of the government-sponsored enterprises' (GSE) profits, NationalMortgageNews.com reported on Friday. A U.S. District Court judge in Kentucky ruled that the Federal Housing Finance Agency did not exceed its authority in entering into an agreement with Treasury in 2012 that sweeps the GSEs' profits into the U.S. Treasury. The decision handed down by Chief Judge Karen Caldwell builds on a decision in Perry Capital LLC v. Treasury Secretary Jack Lew. The 2014 decision brought by hedge fund Perry Capital was the first setback for private shareholders who are suing the government. In Arnetia Joyce Robinson v. FHFA, the GSE shareholders contended that FHFA has failed to rehabilitate the two mortgage companies and said a net worth sweep of the GSEs' quarterly profits will lead to a "nationalization of the two companies."
