Waterstone: Freddie Mac, Fannie Mae Common Shares 'Worth Zero'

The story of mortgage lenders Fannie Mae and Freddie Mac has been rehearsed many times. Federal National Mortgage Association (OTCBB:FNMA) and Federal Home Loan Mortgage Corp (OTCBB:FMCC) experienced unusual activity in their stocks in the latter part of May which skyrocketed their market caps in a matter of hours. While there are several big names who have long positions in Fannie and Freddie, Bruce Berkowitz, John Paulson and Richard Perry are just a few, bearish positions in these companies are less common. Waterstone Market Neutral Fund has short bets in Fannie and Freddie which have not worked well for the…