Fannie Mae & Freddie Mac

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The History of Fannie Mae & Freddie Mac
Federal national Mortgage Association (Fannie Mae) was founded in 1938. At that time, because the government could non provide the loan on mortgage continuously, there are too many families could not afford their houses or suffered from the risk of losing their places of residence. In order to append the level of kin ownership and the availability of affordable trapping to the citizens, the U.S. government founded Federal National Mortgage Association, known as Fannie Mae, in 1938. Fannie Mae provided local banks with federal money to finance understructure mortgages. Since the establishment, Fannie Mae has been served to expand the secondary mortgage grocery store by securitizing mortgages in the form of Mortgage-Backed Securities (MBS)1.
From 1938 to 1968, Fannie Mae was the sole institution that allowed lenders to reinvest their assets into more lending, and in operation insured the value of mortgage by the U.S. government. But in 1968, Fannie Mae became the private corporation. Its business expanded into the mortgages, which are not guaranteed by federal housing administration. In 1970, to expand the secondary market for mortgages in the U.S.



, in the hope of providing competition against Fannie Mae, Congress determined to establish the Federal Home Loan Mortgage commode (Freddie Mac) as another private corporation2.
The business of Freddie Mac is fundamentally same as the business of Fannie Mae. Their duty is to provide the fluidity to the nations mortgage financial system. That is, Fannie Mae and Freddie Mac corrupt the home loans made by the other private firms, parcel of land those loans into the mortgage-backed securities, and make sure the timely payment of principal and disport on those securities to outside investors. Fannie Mae and Freddie Mae also own some home loans and mortgage securities in their own investment portfolios. Fannie Mae became the biggest Government-Sponsored Enterprise (GSE) that set-aside(p) in financial business....If you want to get a beat essay, order it on our website: Ordercustompaper.com



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