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Tuesday, Mar 19, 2024
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First American: $38M in Fannie Mae, Freddie Mac

Santa Ana-based First American Corp. said on Tuesday its $37.9 million investment in Fannie Mae and Freddie Mac will decline in value because of this week’s takeover of the mortgage investors by the government.

The title and business information company said it holds $30.3 million of Fannie Mae’s perpetual preferred securities, and an additional $7.6 million of perpetual preferred securities in Freddie Mac.

Perpetual preferred securities are investments that pay quarterly dividends but don’t give the holder voting rights that come with stock.

First American said it doesn’t hold any common stock issued by Fannie Mae or Freddie Mac.

The company, which counts a market value of about $2.6 billion, said it would take a non-cash charge to its third-quarter earnings related to the Freddie and Fannie investments.

The amount of that write-down wasn’t disclosed.

“The value of these securities has decreased materially and it is unclear if and when the value will improve,” First American said in a statement.

The government this week placed Fannie and Freddie into conservatorship, replaced their chief executives and directors, and announced a plan to infuse billions of dollars into the companies.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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