Virginia

Preferred Backlash to GSE Bailout Grows 

Holders of preferred equity in both Fannie Mae [stock FNM][/stock] and Freddie Mac [stock FRE][/stock] aren’t likely to take the Treasury’s weekend move to place both mortgage finance giants into conservatorship lying down, sources suggested to HW on Thursday. The move has roiled preferred securities on both GSEs, as well as other preferred equities as well. Numerous holders of both preferred and common stock interests in the GSEs have been issuing press statements regarding their exposure and impact on capital, including many community banks.