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Paulson, Blackstone Said to Back Plan to Free Fannie-Freddie

  • Moelis’s proposal calls for raising $180 billion in capital
  • Investment firm authored plan as adviser to GSE shareholders
Houses in Alameda, California stand in this aerial photograph in Alameda, California, U.S., on Monday, Oct. 5, 2015.
Photographer: David Paul Morris/Bloomberg
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Paulson & Co. and Blackstone Group LP are among investors backing a proposal that Fannie Mae and Freddie Mac be recapitalized and released from U.S. control without legislation. Taxpayers would receive as much as $100 billion, according to the plan, which could also deliver a windfall for shareholders.

The blueprint released Thursday was developed by investment bank Moelis & Co. in its capacity as a financial adviser to Paulson & Co., Blackstone GSO Capital Partners and other investors, according to people familiar with the matter. The plan would let Fannie and Freddie build capital before the government sells its stakes in the mortgage-finance giants.