It seems that every policymaker and their brother has an opinion on what type of mortgage finance system reform needs to happen.

No matter which side of the aisle the opinions are coming from, the main dilemma that seems to keep stumping everyone is what to do with mortgage giants Fannie Mae and Freddie Mac

While some want to wind down both government-sponsored enterprises within five years, others simply want private capital to have a bigger stake in the system while still having a government backdrop.

However, the bigger mystery posed by both enterprises is their enticing allure.

Fannie Mae and Freddie Mac were among the most actively traded shares by retail investors in June, said James Frischling, president and co-founder of NewOak

Investors are betting that these firms present opportunities with strong upside despite being delisted from the New York Stock Exchange and put into conservatorship by the government.

However, critics will claim that the enterprises were contributors to the housing bubble and ultimately the financial crisis. 

"They will also argue that without a government bailout, the failure and complete wipeout of private investment in the companies was a certainty," Frischling explained.

He added, "However, a number of savvy hedge funds have filed lawsuits claiming that the government is taking too much profit on the rescues of Fannie and Freddie and that the preferred shares of these mortgage giants should receive some of the windfall that has been created as a result of the recovery in the housing market."

The bailout of Fannie and Freddie was intended to bring some claim to the volatile markets of 2008 as well as protect and support the residential housing markets. 

The ultimate decision to put the GSEs into conservatorship and leave 20% of the stock outstanding was done under great stress and pressure, Frischling argues.

As a result, a number of hedge funds see the value in these shares and retail investors now see the same attraction.

But are these shares under-valued and do they represent a buying opportunity? 

It’s simply too early to tell.

However, Frischling spins this into a different, yet amusing perspective: If Hank Greenberg can sue the government over the American International Group [stock AIG][/stock] bailout, a shareholder suit over the enterprises seems par for the same course.