With embattled mortgage purchasers Fannie Mae and Freddie Mac announcing plans to delist Wednesday, investors who took a chance on the now government-backed companies are feeling even more ofÂ a pinch.
Ted Parrish, principal of Hennsler Financial Group, says those who invested in the flailing companies during the crash of the housing market now need to re-evaluate their investment goals. As for mortgage holders, Parish says the delisting will have little to no impact. “Operations are still going on with the government backing the companies, and government will back existing mortgages.â€
As it stands right now, Fannie Mae and Freddie Mac shares will trade on the Over-the-Counter Bulletin Board, according to the Federal Housing Finance Agency, the companies’ regulator. The OTC is a trading exchange for many penny stocks, says Parrish, not a place you would look to find high quality, long-term investments. “Typically, getting removed from the New York Stock Exchange is a clear indication that a company is going to cease to exist at some point,â€ he adds.
Friday, Freddie Mac closed at 40 cents per share while Fannie Mae closed at 35 cents per share.