Why Fannie, Freddie Are Plunging After Court Ruling

The video discusses the 2008 bailout of Fannie Mae and Freddie Mac, and the 2012 amendment that redirected all profits to the U.S. government. Shareholders sued, claiming the amendment was unconstitutional. A judge ruled the government acted within its authority, but shareholders can appeal. The case continues with multiple lawsuits in different courts.

What significant change did the government make to the terms of the Fannie and Freddie bailout in 2012?

• They reduced the dividend rate to 5%.

• They diverted 100% of the profits to the U.S. Treasury.

• They allowed shareholders to receive 50% of the profits.

• They forgave all outstanding debts.

Under which statute did the government claim authority to change the bailout terms?

• The Affordable Care Act

• The Dodd-Frank Act

• The Housing and Economic Recovery Act

• The Federal Reserve Act

What was the main argument of the shareholders against the government's amendment to the bailout terms?

• It was a violation of antitrust laws.

• It was a breach of the FHFA's fiduciary duty.

• It was a violation of international trade laws.

• It was a breach of environmental regulations.

What did the judge say about the nature of the issue raised by the amendment?

• It was a moral and policy issue.

• It was a financial issue.

• It was a constitutional issue.

• It was a legal issue.

What is the next step for shareholders after the judge's ruling?

• They need to negotiate with Congress.

• They should file a new lawsuit.

• They can appeal the decision.

• They must accept the ruling.