Shareholder classes won a $612.4M jury verdict, $812M with interest, against FHFA over the 2012 ‘net worth sweep’ of Fannie Mae and Freddie Mac profits. FHFA’s appeal was argued in the D.C. Circuit in April 2026 as Washington pushes to release the GSEs from conservatorship.
LATEST DEVELOPMENT · JUL 24, 2026
On July 24, 2026, the D.C. Circuit issued an opinion and judgment affirming the $812M judgment against FHFA, Fannie Mae, and Freddie Mac, rejecting the defendants’ arguments for reversal including that Collins v. Yellen required dismissal of the claims.
BACKGROUND
In August 2012, four years into the conservatorship of Fannie Mae and Freddie Mac, FHFA and the Treasury adopted the “Third Amendment” to the senior preferred stock purchase agreements, sweeping the enterprises’ entire net worth to the government each quarter in place of a fixed 10% dividend. Junior preferred and common shareholders sued in 2013, arguing the sweep gutted any prospect of dividends or residual value. After the Supreme Court’s Collins v. Yellen narrowed the statutory attacks, the consolidated D.D.C. class action proceeded on the theory that the sweep breached the implied covenant of good faith and fair dealing in the shareholders’ contracts. A first trial ended in a hung jury in late 2022. On retrial, a jury on 14 August 2023 unanimously found for the classes and awarded $612.4M, and Judge Royce Lamberth entered final judgment of approximately $812M including prejudgment interest on 20 March 2024.
Lamberth denied FHFA’s renewed motion for judgment as a matter of law on 14 March 2025, finding “ample evidence” behind the verdict. FHFA’s appeal was argued before a three-judge D.C. Circuit panel on 21 April 2026, with the agency defending its broad conservator powers and the classes urging that Collins settled only FHFA’s authority to adopt the sweep, not whether doing so breached shareholders’ reasonable expectations. The decision is pending while the administration simultaneously advances plans to take the enterprises out of conservatorship, a release in which the same junior shareholders hold a direct stake.
TIMELINE
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JUL 24, 2026APPEALD.C. Circuit affirms $812M judgment against FHFAThe U.S. Court of Appeals for the D.C. Circuit affirmed the district court’s $812M judgment in favor of the Fannie Mae and Freddie Mac shareholder classes, rejecting FHFA’s arguments including that Collins v. Yellen required dismissal of the claims.
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APR 21, 2026HEARINGD.C. Circuit hears FHFA’s appealA three-judge panel actively questions both sides on conservator powers and the reach of Collins v. Yellen. Decision pending.
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MAR 14, 2025PROCEDURALCourt denies FHFA’s post-trial JMOL motionLamberth upholds the verdict, citing ‘ample evidence’ supporting the jury’s findings.
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MAR 20, 2024JUDGMENTFinal judgment of ~$812M enteredJudge Lamberth’s judgment adds prejudgment interest to the verdict.
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AUG 14, 2023JUDGMENTRetrial jury awards shareholder classes $612.4MThe jury unanimously finds FHFA breached the implied covenant of good faith and fair dealing by adopting the sweep.
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NOV 2022OTHERFirst trial ends in a hung jury
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FEB 21, 2017APPEALD.C. Circuit revives contract-based claimsWhile upholding dismissal of the statutory claims, the court of appeals lets the implied-covenant theory proceed.
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2013FILINGShareholder class actions filed and consolidated in D.D.C.
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AUG 17, 2012OTHERFHFA and Treasury adopt the ‘net worth sweep’The Third Amendment replaces the 10% dividend with a quarterly sweep of the enterprises’ entire net worth to Treasury.