Berkowitz's Fairholme Offers Statement on Fannie, Freddie Perferred Stock, Says Ready to Help with Restructurings
Fairholme Capital Management announced that its clients, including mutual fund shareholders of The Fairholme Fund and The Fairholme Allocation Fund, own approximately $2.4 billion par value of Fannie Mae and Freddie Mac Preferred Stock and are ready to help with a restructuring that accelerates the return of meaningful investment to the secondary mortgage market.
Privately-owned Fannie Mae and Freddie Mac are critical to our nation's economic security, lowering the cost and increasing the availability of homeownership.
There are no substitutes. Fannie and Freddie currently purchase or insure 6 out of every 10 home mortgages in America. Today, they are stronger than ever – enabling the United States Treasury to rapidly recoup its temporary emergency investments in both entities.
Taxpayer dollars expended by the government during a time of national crisis will be fully repaid. And equitable treatment of taxpaying shareholders, including community banks, insurance companies, and mutual funds holding Preferred Stock, must be restored with dividends reinstated. Repaying taxpayer investments, restructuring government guarantees, and restoring shareholder property are not mutually exclusive. This is the American way.
The time to restructure Fannie and Freddie is upon us. Sustaining our nation's economic recovery requires it.
On behalf of the hundreds of thousands of Fairholme Funds shareholders who helped to rebuild American International Group, Bank of America, CIT Group, General Growth Properties, MBIA Inc., and others after the Great Recession – we stand ready to do our part.
Investing in the Funds involves risks including loss of principal. The Funds' investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the Funds, and it may be obtained by calling Shareholder Services at 1-866-202-2263 or visiting our website www.fairholmefunds.com. Read it carefully before investing.
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