Why Shares of Fannie Mae and Freddie Mac Are Up This Week

Shares of the government-sponsored entities rose this week after the Supreme Court made rulings that impacted both organizations.

The stock of the Federal National Mortgage Association (OTC: FNMA), or Fannie Mae, rose more than 15% after market close Thursday, while shares of the Federal Home Loan Mortgage Corporation (OTC: FMCC), or Freddie Mac, had risen nearly 9%.

Fannie and Freddie, which create liquidity in the mortgage market by buying and packaging mortgages into mortgage-backed securities, have been under government conservatorship since the Great Recession after taking on too much exposure to sub-prime mortgages. In that arrangement, the U.S. Treasury provided $100 billion each to Fannie and Freddie in exchange for senior preferred stock and other financial arrangements.

Source Fool.com