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Cheers
Marc
Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are government-sponsored enterprises (GSE) with a mandate to expand affordable housing in the U.S. and provide liquidity and stability to the U.S. housing and mortgage markets. Created in 1938 at the request of President Franklin Roosevelt, Fannie Mae was chartered by Congress in 1968 as a private, shareholder-owned company. Freddie Mac was chartered by Congress in 1970.
Neither Fannie Mae nor Freddie Mac lends funds directly to home buyers. Instead, the two organizations fulfill mandates and achieve objectives by operating in the U.S. secondary mortgage market. Both institutions work with bankers and brokers to ensure that funds are allocated for lending at affordable interest rates; they achieve this objective by buying mortgages. (To find out where your mortgage payments go, read Behind The Scenes Of Your Mortgage.)
Together, Fannie Mae and Freddie Mac own (or back) more than $5 trillion of U.S. mortgages in 2009. The two companies account for almost half of the $12 trillion U.S. mortgage market. But even the size of the companies could not prevent the two institutions from being engulfed by the global financial crisis of 2008 - the biggest since the Great Depression of the 1930s. (To learn more about what caused the problems back then, be sure to read What Caused The Great Depression?)
Neither Fannie Mae nor Freddie Mac lends funds directly to home buyers. Instead, the two organizations fulfill mandates and achieve objectives by operating in the U.S. secondary mortgage market. Both institutions work with bankers and brokers to ensure that funds are allocated for lending at affordable interest rates; they achieve this objective by buying mortgages. (To find out where your mortgage payments go, read Behind The Scenes Of Your Mortgage.)
Together, Fannie Mae and Freddie Mac own (or back) more than $5 trillion of U.S. mortgages in 2009. The two companies account for almost half of the $12 trillion U.S. mortgage market. But even the size of the companies could not prevent the two institutions from being engulfed by the global financial crisis of 2008 - the biggest since the Great Depression of the 1930s. (To learn more about what caused the problems back then, be sure to read What Caused The Great Depression?)
Cheers
Marc