The proposal about the future course of action for Federal National Mortgage Assctn Fnni Me (OTCMKTS:FNMA) and Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) recently got tabled but one set of the group, which was ignored in the new proposal, was the shareholders of the two companies.

Overlooked an important group

The proposal was put forth by a group of advisors, who recommended merging of both the government-sponsored entities (GSEs) into one government corporation and named as the National Mortgage Reinsurance Corporation (NMRC). However, the advisors did not outline any substantial change in the working of the new corporation than what the two government units are undertaking presently.

At the same time, the panel recommended transferring the noncatastrophic credit risk to the private market. Apart from this, an explicit government guarantee was suggested to be applicable to mortgage-backed securities, which will be funded using the guarantee fees levied by NMRC. However, the advisors failed to reach any resolution for the existing shareholders of these companies.

Series of lawsuits filed in the past

Both Fannie Mae and Freddie Mac were put under the government conservatorship in 2008. However, the terms of this conservatorship were changed in 2012 that diverted nearly all of the profits of these companies to the U.S. Treasury. Such change of terms offended several investors, who saw themselves at the losing end.

Now, the new proposal also fails to address the concerns of these investors, which can aggravate their fears. It is to be noted that Fairholme Funds and Bill Ackman’s Pershing Square are some of the investors, who have filed lawsuits against the ad-hoc changes in the government conservatorship terms.

Commenting on the release of the new proposals, Richard Bove of Rafferty Capital Markets, said that the investors want to know what they will gain if the proposal is adopted. The stock of Fannie Mae slipped 1.43% to $1.38 during the previous session.