Perry Capital sues US Treasury over Fannie and Freddie dividends Perry Capital, one of the largest US hedge funds, is suing the US Treasury over the terms of large dividend payments it has been receiving from Fannie Mae and Freddie Mac, the mortgage companies taken over by the government during the depths of the housing crisis in 2008. The hedge fund, which has invested in Fannie Mae and Freddie Mac, alleges the Treasury violated the rules associated with its control of the companies in 2012 when it began requiring them to funnel all their profits back to the US government in the form of a dividend. This year, Fannie Mae and Freddie Mac have paid $66bn to the US Treasury as the housing market recovered and their finances improved. The Obama administration projects $238bn in revenues related to dividends from these "government-sponsored enterprises" over the next decade. "It is critically important to our economy and for the future of housing finance in the United States that investors have confidence that the rule of law - not populism or politics - will guide government policy over securities," Perry Capital said in a statement. Perry Capital supports efforts to reform Fannie Mae and Freddie Mac and to strengthen the overall housing market. At the same time, it is equally important that all policy decisions regarding the companies be made in accordance with contractual rights and applicable law. Before the government changed the rules in 2012 under the so-called "sweep amendment," dividends from Fannie Mae and Freddie Mac were capped at a fixed amount of 10 per cent. The lawsuit was filed in federal court in the District of Columbia and names the Federal Housing Finance Agency, which regulates Fannie and Freddie, as a defendant in addition to the Treasury. It is the latest sign of unrest among shareholders in Fannie Mae and Freddie Mac, who feel they are not reaping the benefits to which they are entitled as the companies flourish along with the housing rebound. Last month, the Police Retirement System of Austin, Texas, and a bank from the state of Washington sued the government over its takeover of Fannie Mae and Freddie Mac, seeking billions of dollars in damages. Perry Capital is asking the Treasury to use the dividend money to pay down its stake in the government-sponsored enterprises. The Treasury did not immediately reply to a request for comment. Perry Capital's move comes amid a growing debate in Congress about the future of Fannie Mae and Freddie Mac. Last month Bob Corker, a Tennessee Republican, and Mark Warner, a Virginia Democrat, introduced legislation that would gradually wind them down and inject more private capital into housing finance, with the intent that taxpayers would no longer be exposed to the risk of another big bailout.