White House lawyers lately asked a federal court to permit them access to relevant documents in the ongoing case between the Fed and Fairholme Funds over mortgage entity Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and its competitor Freddie Mac. This move suggests that the White House is looking for a negotiated deal in the numerous cases which will benefit the two mortgage companies’ shareholders.
Fairholme has a big stake in Federal Home and Fannie Mae and, the ongoing case claims that the Fed took the two mortgage firms’ profits unjustly and deposited them in the U.S. Treasury, infringing the Fifth Amendment. The case revolves around the concept that no one should have permission to take private assets for public use without any compensation.
The accused in Federal National and Freddie Mac cases are regulatory body FHFA and U.S. Treasury Department. These entities have stated that due to executive privilege they are not bound to present over 10,000 documents. Moreover, large parts of the presented documents have been redacted and not revealed to the public due to these entities having executive privilege.
There is a new turn in case with the three advisors of White House planning to assess the documents, which clearly suggests that the White House didn’t know of what the U.S. Treasury and FHFA were doing with their executive privileges. The recent uncertainty in global economy and sharp sell- off in equity and commodity market has forced the authorities to seriously consider the matter.
Along with this, there is pressure from the civil-rights groups, like the NAACP, to provide assistance to low-income households. The idea is to allow Federal National and Freddie to perform their original work and help the housing markets to prompt economic growth.
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) may have ended the last trading session with a solid gain of 3.95% but the structure of the daily candle hasn’t turned out to be a very bullish one. The difference between the day high of $2.47 and the final closing price of $2.37 was considerable and that indicated rejection at higher levels. The volume of the day at 10.4 million was considerably higher than the daily average of 3.5 million and that should have been resulted in a much stronger bullish candle, which wasn’t the case. All these points towards a short term correction at least.