For many investors who were scored from the housing market crisis, Democrats and angry investors lead the charge to dismantle Fannie Mae and Freddie Mac. While these companies remain immensely profitable and have paid back the money borrowed from the government, there is still talk amongst the Obama Administration that they will do away from having these companies.
Lawsuits are pending that will become a huge factor in determining their directions. If it is ruled that the government can take profits away from FNMA, this would be a huge loss for shareholders.
In my estimation, the most likely scenario will be that the companies will remain in business. This is because the housing market needs them. They provide a valuable service and homeowners depend on them. Additionally, they are viable businesses who are thriving currently.
If FNMA can recover, similar to how Bank of America did during the financial crisis, I see no reason why the stock cannot go back to $20 per share. As a result, and because I view this as very possible, I recommend buying shares of FNMA. Disclosure, I am long FNMA.
Lawsuits are pending that will become a huge factor in determining their directions. If it is ruled that the government can take profits away from FNMA, this would be a huge loss for shareholders.
In my estimation, the most likely scenario will be that the companies will remain in business. This is because the housing market needs them. They provide a valuable service and homeowners depend on them. Additionally, they are viable businesses who are thriving currently.
If FNMA can recover, similar to how Bank of America did during the financial crisis, I see no reason why the stock cannot go back to $20 per share. As a result, and because I view this as very possible, I recommend buying shares of FNMA. Disclosure, I am long FNMA.
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