Hedge Funders' Beloved Fannie And Freddie Trade Is Getting Demolished Today

Shares of mortgage giants Fannie Mae and Freddie Mac are cratering right now.

Fannie is down 40% and Freddie is down 38% after U.S. lawmakers released a plan for reforming the government-operated entities.

These stocks have been favourites of hedge fund managers as of late, with some investors hoping the stock will eventually start to return dividends to shareholders instead of the U.S. Treasury.

Earlier today, the Senate Banking Committee edged closer toward a bipartisan deal to overhaul both entities, which were seized by the government during the housing crisis.

Here’s Fannie Mae:

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.