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Stock impact report

THE ECONOMIST: Fannie and Freddie [Yahoo! Finance]

Federal National Mortgage Association (FNMA) 
Company Research Source: Yahoo! Finance
Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), two huge public entities which buy mortgages from lenders to increase their liquidity, enable more mortgages, and facilitate homeownership in the U.S. Fannie Mae was created by Congress in 1938 (as part of the National Housing Act), with Freddie Mac being chartered in 1970. After buying mortgages from banks and other entities, they either hold the loans or bundle them into mortgage-backed securities to be sold to private investors. Over time, each entity was reorganized to include shareholders. Nonetheless, because there was at least implicit government backing, Fannie and Freddie enjoyed some competitive advantage over other institutions. In 2008, amidst the housing and financial crisis that precipitated the Great Recession, both firms incurred huge losses and were placed into conservatorship under the Federal Housing Finance Agency, with the Treasury extending substantial suppor Show less Read more
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