Hedge funds ignore Fannie-Freddie 'noise'

Getty Images

Hedge fund managers appear unconcerned about the sharp price drops of Fannie Mae and Freddie Mac stock this week and remain committed to what could be one of the most lucrative buy-cheap, sell-high investments since the financial crisis.

Common shares of the two companies declined as much as 30 percent this week after the Senate Banking Committee announced an agreement Tuesday on legislation to wind down and eliminate the government-sponsored mortgage backers in favor of a reorganized Federal Mortgage Insurance Corp.

The proposal would see private investors taking the first 10 percent of losses. Preferred shares, which theoretically would be paid first in a liquidation, also fell—albeit not as sharply.

A slew of commentary followed from politicians, analysts, consumer advocates and others on the plan and its value. But a small group of hedge and mutual funds is ignoring the chatter and paper losses in hopes of a much bigger payday.

(Read more: Fannie stock dives after Senate bankers reach deal)