Mortgages:Fannie Mae and Freddie Mac
How they stand for? Fannie Mae and Freddie Mac are called sponsored enterprises from government initially formed by the federal government. Fannie Mae is called for Federal National Mortgage Assn. in Washington, D.C. Freddie Mac is called for Federal Home Loan Mortgage Corp. in McLean, Va.
Fannie Mae and Freddie Mac buy mortgages from savings and loans, banks and other lenders to generate more cash for those lenders to make more home loan. Together they hold or guarantee $5.4 trillion of mortgages, about half of the nation's home loans outstanding. Apparently this two has no difference; they are both buying and guaranteeing loans. Let the lenders easily loan even for those who can hardly afford?
We heard that Fannie Mae and Freddie Mac are both in trouble, as home prices fell, so did the value of the mortgages the companies held, lowering their already small cushions of capital. As more of the loans they had backed went bad, they were no longer able to raise money from private sources. Is this one of the cause of US economy crisis? How is it affecting our economy crisis today? How will they fix it now?
Fannie Mae and Freddie Mac buy mortgages from savings and loans, banks and other lenders to generate more cash for those lenders to make more home loan. Together they hold or guarantee $5.4 trillion of mortgages, about half of the nation's home loans outstanding. Apparently this two has no difference; they are both buying and guaranteeing loans. Let the lenders easily loan even for those who can hardly afford?
We heard that Fannie Mae and Freddie Mac are both in trouble, as home prices fell, so did the value of the mortgages the companies held, lowering their already small cushions of capital. As more of the loans they had backed went bad, they were no longer able to raise money from private sources. Is this one of the cause of US economy crisis? How is it affecting our economy crisis today? How will they fix it now?
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