Sisti v. Federal Housing Finance Agency

The Federal Home Loan Mortgage Corporation (Freddie Mac) (defendant) and the Federal National Mortgage Association (Fannie Mae) (collectively, the entities) (defendants), (collectively, the entities) were created by Congress to provide nationwide access to affordable mortgages. In 2008, in response to the subprime- mortgage crisis, Congress created the Federal Housing Finance Agency (FHFA) (defendant), an independent agency responsible for supervising Fannie Mae, Freddie Mac, and other entitiesthe entities. The FHFA placed Fannie Mae and Freddie Macthe entities into conservatorship. As conservator, FHFA controlled the rights and privileges of the entities’ shareholders and directors. FHFA elected the entities’ boards of directors and determined the boards’ sizes and scopes of authority. FHFA owned all of the entities’ senior preferred stock and prohibited the entities from paying dividends. Instead, FHFA required the entities to pay dividends directly to the United States.S. Treasury. The FHFA’s director had full discretion over the length of the conservatorship. There was no date set for the conservatorship’s end, nor were criteria established which that would trigger its automatic end. After the establishment of the FHFA conservatorship, Judith Sisti (plaintiff) defaulted on her home mortgage. The servicer of Sisti’s mortgage, acting as Freddie Mac’s agent, conducted a nonjudicial foreclosure on Sisti’s property. Cynthia Boss (plaintiff) also defaulted on her home mortgage. Boss’s mortgage had been assigned to Fannie Mae, which also conducted a nonjudicial foreclosure. Sisti and Boss filed separate lawsuits, both asserting the claim that FHFA’s conservatorship had converted Fannie Mae and Freddie Macthe entities into government actors bound by the Fifth Amendment’s due- process requirements. Sisti and Boss argued that the nonjudicial foreclosures on their properties had violated their Fifth Amendment due- process rights. Sisti’s and Boss’s lawsuits were consolidated, and Fannie Mae, Freddie Mac,the entities and FHFA moved for judgment on the pleadings.