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Fannie-Freddie Overhaul Might Mint Hedge Fund Riches, Losses

  • Senators are said to weigh proposals that impact shareholders
  • Investors say outcome has been like ‘Waiting for Godot’
Rows of houses stand in Las Vegas, Nevada, U.S., as seen in this aerial photo taken on Tuesday, Sept. 22, 2009. The median home price in the Las Vegas area fell 40 percent to a 10-year low in August as sales of foreclosed properties cut the value of single family houses and condominiums, MDA DataQuick said.

Photographer: Jacob Kepler/Bloomberg

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They’ve lost in court. They’ve been rebuffed by government agencies. Now, the fates of hedge funds and other investors in mortgage-finance giants Fannie Mae and Freddie Mac could lie with an old adversary: the U.S. Congress.

Whether shareholders make a killing or get wiped out might hinge on a yet-to-be written provision of a draft Senate bill that marks lawmakers’ latest attempt to overhaul Fannie and Freddie, which have been wards of the state for almost a decade.