The investor Bruce R. Berkowitz is providing seed money for a new group that is running advertisements in large newspapers and on television to support Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies that lawmakers are trying to wind down.
Mr. Berkowitz’s Fairholme Capital Management mutual fund, which is an investor in both Fannie and Freddie, is a member of the coalition that is backing the group behind the ad campaign â€" United for American Homeownership, said a person briefed on the matter who was not authorized to discuss it publicly. This person also said that Fairholme provided seed money to the group.
The group took out full-page ads on Tuesday in The New York Times and The Wall Street Journal and began running television ads on Sunday on certain stations. The group’s website formally went live on Tuesday as well.
The message of the ad campaign, which prominently features a United States flag and images of families with children, is that political leaders in Washington should work toward “preserving and strengthening†Fannie and Freddie.
Fairholme and other investors who have bought shares in Fannie and Freddie have been concerned that any restructuring of the mortgage giants, which required a government bailout to survive, could harm their investment. In February, Mr. Berkowitz’s firm sent a letter to the boards of the two companies asking them to give investors a greater say in how they are run. The companies are regulated by the Federal Housing Finance Agency.
In November, Mr. Berkowitz’s firm announced a proposal for it and other private investors to purchase the mortgage security insurance business of Fannie and Freddie.
Fannie and Freddie are the main guarantors of mortgage-backed securities in the United States. The companies got into trouble in the run-up to the financial crisis by taking on too much risk by guaranteeing mortgage securities backed by loans to borrowers with shaky credit histories.
The group’s website says its board includes Bob Kerry, the former United States senator; Harry C. Alford, chief executive of the National Black Chamber of Commerce; and Joshua Angel, a bankruptcy and restructuring lawyer with Herrick Feinstein in New York.
The website also provides links to news articles and opinion pieces, including one titled, “Fannie Mae and Freddie Mac must not die,†which was written by the bank analyst Dick Bove.
On Tuesday, the Senate Banking Committee is expected to start considering a proposal to wind down Fannie and Freddie and replace them with a new federal insurance program for mortgage bonds.
A Fairholme representative was not immediately available for comment.
