The Federal National Mortgage Association (FNMA),commonly known as Fannie Mae,is a United States government-sponsored enterprise (GSE) and,since 1968,a publicly traded company. Founded in 1938 during the Great Depression as part of the New Deal,the corporation's purpose is to expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities (MBS),allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations. Its brother organization is the Federal Home Loan Mortgage Corporation (FHLMC),better known as Freddie Mac.
The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities,including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods,a practice known as redlining.
The Federal Home Loan Mortgage Corporation (FHLMC),commonly known as Freddie Mac,is a publicly traded,government-sponsored enterprise (GSE),headquartered in Tysons,Virginia. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with its sister organization,the Federal National Mortgage Association,Freddie Mac buys mortgages,pools them,and sells them as a mortgage-backed security (MBS) to private 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" is a variant of the FHLMC initialism of the company's full name that was adopted officially for ease of identification.
Mark Walter Olson was an American economist and bank executive who served as a member of the Federal Reserve Board of Governors from 2001 to 2006. Filling an unexpired term to end on January 31,2010,he resigned on June 21,2006,in order to run the Public Company Accounting Oversight Board.
The 2000s United States housing bubble or house price boom or 2000shousing cycle was a sharp run up and subsequent collapse of house asset prices affecting over half of the U.S. states. In many regions a real estate bubble,it was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006,started to decline in 2006 and 2007,and reached new lows in 2011. On December 30,2008,the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.
The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession,with millions losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system,including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).
The Office of Terrorism and Financial Intelligence (TFI),formed in 2004,is an agency of the United States Department of the Treasury. TFI works to reduce the use of the financial system for illicit activities by terrorists,money launderers,drug cartels,and other national security threats.
Richard H. Neiman is an American financial advisor and attorney who served as the 43rd Superintendent of Banks of New York,managing the New York State Banking Department.
The Federal Housing Finance Agency (FHFA) is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board (FHFB),the Office of Federal Housing Enterprise Oversight (OFHEO),and the U.S. Department of Housing and Urban Development government-sponsored enterprise mission team,absorbing the powers and regulatory authority of both entities,with expanded legal and regulatory authority,including the ability to place government-sponsored enterprises (GSEs) into receivership or conservatorship.
In September 2008,the Federal Housing Finance Agency (FHFA) announced that it would take over the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Both government-sponsored enterprises,which finance home mortgages in the United States by issuing bonds,had become illiquid as the market for those bonds collapsed in the subprime mortgage crisis. The FHFA established conservatorships in which each enterprise's management works under the FHFA's direction to reduce losses and to develop a new operating structure that will allow a return to self-management.
James B. Lockhart III is an American U.S. Navy officer,business executive,and,since September 2009,Vice Chairman of WL Ross &Co,which manages $9 billion of private equity investments,a hedge fund and a Mortgage Recovery Fund. It is a subsidiary of Invesco,a Fortune 500 investment management firm. He coordinates WL Ross's investments in financial services firms and mortgages. Lockhart serves co-chairs the Bipartisan Policy Center's Commission on Retirement Security and Personal Savings.
Regulatory responses to the subprime crisis addresses various actions taken by governments around the world to address the effects of the subprime mortgage crisis.
The Emergency Economic Stabilization Act of 2008,also known as the "bank bailout of 2008" or the "Wall Street bailout",was a United States federal law enacted during the Great Recession,which created federal programs to "bail out" failing financial institutions and banks. The bill was proposed by Treasury Secretary Henry Paulson,passed by the 110th United States Congress,and was signed into law by President George W. Bush. It became law as part of Public Law 110-343 on October 3,2008. It created the $700 billion Troubled Asset Relief Program (TARP),which utilized congressionally appropriated taxpayer funds to purchase toxic assets from failing banks. The funds were mostly redirected to inject capital into banks and other financial institutions while the Treasury continued to examine the usefulness of targeted asset purchases.
Loan modification is the systematic alteration of mortgage loan agreements that help those having problems making the payments by reducing interest rates,monthly payments or principal balances. Lending institutions could make one or more of these changes to relieve financial pressure on borrowers to prevent the condition of foreclosure. Loan modifications have been practiced in the United States since the 1930s. During the Great Depression,loan modification programs took place at the state level in an effort to reduce levels of loan foreclosures.
A mortgage servicer is a company to which some borrowers pay their mortgage loan payments and which performs other services in connection with mortgages and mortgage-backed securities. The mortgage servicer may be the entity that originated the mortgage,or it may have purchased the mortgage servicing rights from the original mortgage lender. The duties of a mortgage servicer vary,but typically include the acceptance and recording of mortgage payments;calculating variable interest rates on adjustable rate loans;payment of taxes and insurance from borrower escrow accounts;negotiations of workouts and modifications of mortgage upon default;and conducting or supervising the foreclosure process when necessary.
Many factors directly and indirectly serve as the causes of the Great Recession that started in 2008 with the US subprime mortgage crisis. The major causes of the initial subprime mortgage crisis and the following recession include lax lending standards contributing to the real-estate bubbles that have since burst;U.S. government housing policies;and limited regulation of non-depository financial institutions. Once the recession began,various responses were attempted with different degrees of success. These included fiscal policies of governments;monetary policies of central banks;measures designed to help indebted consumers refinance their mortgage debt;and inconsistent approaches used by nations to bail out troubled banking industries and private bondholders,assuming private debt burdens or socializing losses.
The 2007–2008 financial crisis,or the global financial crisis (GFC),was the most severe worldwide economic crisis since the Great Depression. Predatory lending in the form of subprime mortgages targeting low-income homebuyers,excessive risk-taking by global financial institutions,a continuous buildup of toxic assets within banks,and the bursting of the United States housing bubble culminated in a "perfect storm",which led to the Great Recession.
Joseph M. Otting is an American businessman and government official. He served as the 31st Comptroller of the Currency from November 27,2017 to May 29,2020.
The Making Home Affordable program of the United States Treasury was launched in 2009 as part of the Troubled Asset Relief Program. The main activity under MHA is the Home Affordable Modification Program.
Collins v. Yellen,594 U.S. ___ (2021),was a United States Supreme Court case dealing with the structure of the Federal Housing Finance Agency (FHFA). The case follows on the Court's prior ruling in Seila Law LLC v. Consumer Financial Protection Bureau,which found that the establishing structure of the Consumer Financial Protection Bureau (CFPB),with a single director who could only be removed from office "for cause",violated the separation of powers;the FHFA shares a similar structure as the CFPB. The case extends the legal challenge to the federal takeover of Fannie Mae and Freddie Mac in 2008.
