Fannie Mae and Freddie Mac - Who ARE these people?

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Real Estate Agent with Real Living / Home Realty 29202

 

Owensboro, KY real estateSounds like they could be long lost relatives from the Deep South, however, the phrase “show me the money” is a more accurate descriptor.  Fannie Mae is the way we pronounce the acronym for the Federal National Mortgage Association:  FNMA

 

Here’s the skinny straight from Wikipedia.com:

 

“Federal National Mortgage Association (FNMA) (NYSEFNM), commonly known as Fannie Mae, is a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression. The corporation's purpose is to purchase and securitize mortgages in order to ensure that funds are consistently available to the institutions that lend money to home buyers.[3]

 

On September 7, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA. The action is "one of the most sweeping government interventions in private financial markets in decades".[4][5][6] As of 2008[update], Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half of the U.S.'s $12 trillion mortgage market.”

 

So, In a nutshell, Fannie Mae is the largest owner of mortgage notes in the world!  This is important to know if you are one of the millions of borrowers who are working through a short sale or even working on a loan modification agreement.  Even though your lender may be ABC Mortgage Co., Fannie Mae will have a say in what happens with your loan. 

 

Freddie Mac is how we pronounce the acronym for the Federal Home Loan Mortgage Corporation:  FHLMC.  More from Wikipedia:

 

“The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac (NYSEFRE), is a government sponsored enterprise (GSE) of the United Statesfederal government. Freddie Mac has its headquarters in the Tyson's Corner CDP in unincorporatedFairfax County, Virginia.[1][2]

 

The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as mortgage-backed securities to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name, "Freddie Mac", was an acronym of the company's full name that had been adopted officially for ease of identification.”

As you may have guessed, Freddie is the other power player in the mortgage note industry.  They both create policy that affects the availability of mortgage money.  This is policy that directly affects every family in America.  So, the next time you hear them mentioned on the Nightly Business Report, you might want to pay attention.

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Lending / Financial
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Kentucky Daviess County Owensboro
Groups:
Short Sales Specialists
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Real Living Home Realty
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fannie mae and freddie mac who are they what do they do

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Rainmaker
860,334
David Spencer
Keller Williams Team Realty - Bloomingdale, IL
Chicago Area Commercial-Residential R.E.

Bah! Humbug! Is another good acronym

Feb 27, 2012 05:33 PM #1
Rainer
102,465
Jessica Holtzman
Keller Williams Realty, Inc. - Mount Laurel Township, NJ
Real Estate Agent in Southern New Jersey, CDPE

Gread blog! Than you for really writing a solid article about who they are and different inks for addtional information!!!

Feb 27, 2012 06:46 PM #2
Rainer
174,067
Edward Gilmartin
Boston Homes - Boston, MA

They definitely have a lot of power. So much in fact that they were allowed to go on for several years with little oversight. Many thought they were sound including certain congressmen when nothing could be further from the truth. It would have been better if they were 100% private and not quasi private. or government.

Feb 28, 2012 04:17 AM #3
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Rainmaker
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Karen Pannell

Owensboro KY Real Estate -270-903-2167 Homes, Cond
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