A new federal appeals court decision could clear the way for the U.S. government to turn over many documents sought by investors suing over its 2012 decision to seize the profits of mortgage giants Fannie Mae and Freddie Mac, Reuters reported. The Federal Circuit Court of Appeals yesterday said that a lower court judge mostly acted within her discretion in ordering the disclosure to Fairholme Funds and other investors of 56 documents, which had been sampled from roughly 12,000 that the government withheld on privilege grounds. Writing for a three-judge panel, Circuit Judge Kathleen O'Malley said eight of the documents could be withheld on the basis of either presidential privilege, or privilege of the deliberative process. The government seized Fannie Mae and Freddie Mac in September 2008 as mortgage losses mounted, and put them into a conservatorship under the Federal Housing Finance Agency. Both companies have since become profitable, and according to court papers have returned roughly $68 billion more to the government than they drew down during the financial crisis.
