NO GOOD DEED goes unpunished. And so it is with bipartisan efforts in the Senate to wind down and replace mortgage guarantors Fannie Mae and Freddie Mac. Senators of both parties are being targeted with TV and radio ads that are flagrantly misleading, even by the low standards of campaign propaganda. Among those being blasted by the ads is Virginia Democrat Mark Warner, a key player on housing finance reform who faces a reelection contest against Republican Ed Gillespie — though our purpose here is not to take sides in that race but rather to pierce the policy fog.

The ads are sponsored by the 60 Plus Association. One says the Fannie-Freddie reform bill threatens “pension and retirement funds” just as “Obamacare” threatened health-insurance policies; while retirees lose, it says, “the federal government will seize all profits.” Another ad claims the bill would “put big banks in charge of housing” and give them “handouts.”

These are pretty gross distortions of the status quo, in which big banks already supply most mortgages, and of a proposal for change that would replace the busted Fannie-Freddie model of implicit, unlimited government backing for securitized mortgages with an explicit, limited federal guarantee that would require private-sector bond issuers to absorb most catastrophic losses. Though not a pure free-market alternative to the previous setup, the bill is at least a compromise that mitigates past structural flaws and has both the Obama administration’s support and a chance of passage.

For all the opponents’ mawkishness about middle-­class retirees, the biggest losers from the bill would in fact be a handful of giant hedge funds. Before the government took over Fannie and Freddie at the height of the Great Recession, the entities’ stock was generally privately owned. In the federal bailout, Uncle Sam took 79.9 percent ownership — driving the value of the remaining 20.1 percent almost to zero. Hedge funds snapped up these penny stocks on the off chance that Fannie and Freddie would return to profitability before Congress figured out how to replace them permanently. Now the companies are, indeed, profitable, and the stocks would be worth a lot of money — if not for the fact that the Obama administration meanwhile interpreted federal law to allow the payment of all profits to the Treasury rather than shareholders.

This is the great property rights violation of which the ads warn — without mentioning that there would be no housing recovery, no Fannie and Freddie profits and perhaps no U.S. economy, if taxpayers hadn’t laid out a total of nearly $190 billion to shore up the mortgage businesses over the last half-decade. Whatever the legal merits of the hedge funds’ position — an admittedly complex matter they are separately litigating in federal court — it’s certainly cheeky to condemn using profits from Fannie Mae and Freddie Mac for deficit reduction as a rip-off of the elderly. A well-informed electorate would regard that and other claims of these nebulous ads with appropriate skepticism.