Hedge Funds Wagering on Fannie-Freddie Reincarnation: Mortgages

By Katherine Burton, Zeke Faux and Jody Shenn

Investors including hedge funds are buying the preferred stock of government-controlled mortgage firms Fannie Mae and Freddie Mac in a long-shot bet they will have a future as private companies.

Fannie Mae’s 8.25 percent of preferred shares have more than doubled this year after the company reported record earnings.

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