The recent credit crisis and the collapse of the sub-prime mortgage market has led to the collapse of both Fannie Mae and Freddie Mac, two of the largest issuers of preferred stock. Wall Street has underwritten much of this debt and dumped it on investors looking for income-generating investments that were low risk.  Millions of investors have seen their portfolios and retirement accounts devastated by the collapse of Fannie Mae and Freddie Mac, which many believe should never have happened. 

Over the past 70 years or so, Fannie and Freddie guaranteed close to 90% of all new home mortgages in the United States. Today, Fannie and Freddie are under conservatorship – a move that’s costing taxpayers more than $150 billion.

There were thousands of investors who purchased preferred shares in Fannie Mae and Freddie Mac stock. In 2007 and 2008, investment firms like UBS, Morgan Stanley, Citigroup, Merrill Lynch and others sold billions of dollars of preferred stock issued by the two mortgage lenders. In numerous lawsuits that have followed, investors allege that they never knew about their declining investments in Freddie Mac and Fannie Mae – a decline that was brought about by the two companies’ risky lending, excessive leverage and investments in bad derivative products.

Investors were led to believe these stocks were “conservative” and would provide steady income through above-average dividends.  Also, investors were told that the Federal Government would assure that their investments were safe.

Fannie Mae and Freddie Mac were placed in conservatorship by the federal government, and investors with preferred shares watched their portfolios become worthless.

If you feel you or a family member were misled about Fannie Mae or Freddie Mac preferred shares, call a Securities Arbitration Lawyer for a free consultation on how to recover your investment losses.  To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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