Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market

Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market, December 22, 2010

  • “This study looks at how Fannie Mae and Freddie Mac evolved into the institutions they are today. As context for discussing future options, the study also examines both the rationales that are often cited for federal involvement in the secondary mortgage market and the problems with Fannie Mae and Freddie Mac that existed before the recent financial crisis. The secondary market channels funds to borrowers by facilitating the resale of mortgages and mortgage-backed securities (MBSs). In that market, lenders such as banks, thrifts, and mortgage companies obtain funding for the loans they originate by selling the loans to purchasers such as Fannie Mae, Freddie Mac, and other financial institutions (including banks and insurance companies.)”
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    Posted in: E-Government, Government Documents
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