Now that the Fannie Mae and Freddie Mac are highly profitable and paying huge sums of money to Treasury each quarter — and, as of the third quarter, having mostly repaid all of the government loans given to them during the financial crisis — the fight about what to do with the GSEs' gobs of cash is just warming up. 

The Wall Street Journal has more on this emerging issue, as investors are fighting to get a piece of the action:

But why would anyone bet on companies that can’t recapitalize themselves without the approval of people — namely, the executive and legislative branches of government—who are, for now, publicly opposed to that outcome?

First, they’re betting that a court could force a change. Investors that include Fairholme and Perry Capital LLC, the New York-based hedge fund firm, have filed suits to challenge the profit sweep. The Treasury now faces more than a dozen such lawsuits and is in the process of filing motions to dismiss them.

Second, investors are calculating that the financial profitability of Fannie and Freddie will become too hard for Congress to ignore. Fannie and Freddie play three major functions in the capital markets. They buy mortgages from lenders and issue them as securities. They provide guarantees to investors when those loans default, removing the credit risk and attracting a much broader pool of investors. And they invested in some of those securities themselves before their collapse.