White House lawyers recently requested a federal court to allow them access to documents in the related case between the U.S. and Fairholme Funds over Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and its peer Freddie Mac. This indicates that the White House may be approaching closer to a negotiated deal in the various Federal National court cases which will benefit company’s shareholders, the largest of whom are the U.S. taxpayers.
Fairholme has a large interest in Freddie Mac and Federal National and, its case alleges that the U.S. government took the two mortgage companies’ profits unjustly and had send them to the U.S. Treasury, breaching the Fifth Amendment. It indicates that no one can take private asset for public use without justified compensation.
The defendants in Freddie and Fannie cases are the Federal Housing Finance Agency and U.S. Treasury Department. These agencies have stated that they need not present more than 10,000 documents in this case due to executive privilege. In addition, large parts of the documents already presented have been redacted and not disclosed to the public due to presidential privilege.
Now the three White House advisors intend to have a look at the documents, which indicates that the White House was most likely not aware of what the FHFA and Treasury were conducting using the executive privileges. It appears that the recent decline in stock market and the volatility in global economy have forced the White House to consider the documents.
Also, the various civil-rights groups, such as the NAACP, have requested the White House to provide some assistance for low-income households. In simple terms, the White House needs Freddie and Federal National to get back to work and help the country’s housing markets to fuel economic growth.
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) broke out of the extreme short term congestion zone on Friday and ended the last trading session of the week on a positive note with a solid gain of 4.11%. The volume of 3.9 million was higher than the daily average of 3.2 million but not that significant yet to take a firm stance in the favor of the bulls. From the larger perspective, a short term channel has contained the decline from the July top and the price must break above that channel boundary before the bulls can think of higher levels.