The U.S. Supreme Court gave Fannie Mae and Freddie Mac investors a mixed ruling in their challenge to the government’s collection of more than $100 billion in profits from the government-sponsored enterprises.
The justices threw out claims that the Federal Housing Finance Agency exceeded its authority under federal law. But the court also said investors might be able to win damages on a separate claim that the so-called profit sweep was illegal because the FHFA director was unconstitutionally insulated from being fired by the president.
The second part of the ruling could mean President Joe Biden will be able to oust Mark Calabria, the FHFA director and an advocate for releasing the mortgage giants from government control.
Fannie Mae dropped 15% as of 10:21 a.m. in New York.
This article was provided by Bloomberg News.