Lauren Levy, a lawyer at New York-based, Perry Capital LLC, didn’t immediately reply to a voice-mail message seeking comment. The firm’s outside counsel, Ted Olson at Gibson Dunn & Crutcher LLP, also didn’t immediately respond to a request for comment.

Fannie Mae and Freddie Mac provide housing market liquidity by buying mortgages, then bundling them into securities on which they guarantee payments of principal and interest.

Shares Soared

Shares of each have soared since the election as president-elect Donald Trump’s nominee for Treasury Secretary, Steven Mnuchin, said the new administration would move quickly to end government-control of the companies. Neither Trump nor Mnuchin have specified what they want to do with the companies, but some shareholders have said that they expect Trump to let them share in the companies’ profits.

While each has reported an annual profit since 2012. Fannie Mae’s and Freddie Mac’s earnings power has fallen sharply. In some quarters, the earnings wouldn’t have been large enough to meet what would have been owed under the original 10 percent dividend, a point that government lawyers have said shows that the change in dividend structure was a sound decision. Freddie Mac, for example, has booked a loss in two of the past four quarters.

Earnings Report

The appellate decision follows Fannie Mae’s Nov. 3 report in which it said it made a $3.2 billion profit in the third quarter of 2016, the company’s 19th straight quarterly profit. Those profits were more than the $1.96 billion earned in the same quarter a year earlier. The company had said it would send $3 billion to the Treasury in December, bringing its total payments to $154.4 billion.

Two days earlier, the smaller Freddie Mac said it made a $2.3 billion profit during the third quarter of this year and would send the same amount to the U.S.

Sweep terms let the companies retain an annually diminishing capital buffer that phases out in 2018, meaning any losses later sustained will require one or both to draw on taxpayer funds.

In 2008, as the global economic crisis worsened, Congress passed the Housing and Economic Recovery Act, or HERA, legislation that created the Federal Housing Finance Agency and empowered it to take control of the teetering government-sponsored enterprises. At that time, they were guarantors of more than $5 trillion in residential mortgages, about half the U.S. market, according to a government court filing.