Accurate, Focused Research on Law, Technology and Knowledge Discovery Since 2002

The Effects of Increasing Fannie Mae’s and Freddie Mac’s Capital

In this report, CBO analyzes a policy that would allow Fannie Mae and Freddie Mac to increase their capital by reducing their payments to the government and discusses the effects that it would have on the budget and the mortgage market…Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that help finance the majority of mortgages in the United States. They purchase mortgages that meet certain standards from banks and other originators in the secondary (or resale) market; pool those loans into mortgage-backed securities (MBSs), which they guarantee against losses from defaults on the underlying mortgages; and sell those securities to investors. The two GSEs also buy mortgages and MBSs to hold in their investment portfolios.”

Sorry, comments are closed for this post.