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. In 2023,Fannie Mae was ranked number 28 on the Fortune 500 rankings of the largest United States corporations by total revenue.
Franklin Delano Raines also known as Frank Raines is an American business executive. He is the former chairman and chief executive officer of the Federal National Mortgage Association,commonly known as Fannie Mae,who served as White House budget director under President Bill Clinton. His role leading Fannie Mae has come under scrutiny. He has been called one of the "25 People to Blame for the Financial Crisis" according to Time magazine.
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 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.
Bank of America Home Loans is the mortgage unit of Bank of America. In 2008,Bank of America purchased the failing Countrywide Financial for $4.1 billion. In 2006,Countrywide financed 20% of all mortgages in the United States,at a value of about 3.5% of the United States GDP,a proportion greater than any other single mortgage lender.
A government-sponsored enterprise (GSE) is a type of financial services corporation created by the United States Congress. Their intended function is to enhance the flow of credit to targeted sectors of the economy,to make those segments of the capital market more efficient and transparent,and to reduce the risk to investors and other suppliers of capital. The desired effect of the GSEs is to enhance the availability and reduce the cost of credit to the targeted borrowing sectors primarily by reducing the risk of capital losses to investors:agriculture,home finance and education. Well known GSEs are the Federal National Mortgage Association,known as Fannie Mae,and the Federal Home Loan Mortgage Corporation,or Freddie Mac.
The 2000s United States housing bubble was a real-estate bubble affecting over half of the U.S. states. 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.
Daniel H. Mudd is the former president and CEO of Fannie Mae,a post he held from 2005 to 2008,and more recently for 2+1⁄2 years,the CEO of Fortress Investment Group.
Flagstar Bank is an American commercial bank headquartered in Troy,Michigan. A wholly owned subsidiary of New York Community Bank,Flagstar is one of the largest residential mortgage servicers in the United States,and was among the largest banks in the United States prior to its acquisition in 2022.
The United States 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 of people 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).
Angelo Robert Mozilo was an American banker who was chairman of the board and chief executive officer of Countrywide Financial until July 1,2008. The company's status as a major lender of subprime mortgages made it a central player in a subsequent mortgage crisis which collapsed the industry,bursting a housing bubble which had accumulated throughout the 2000s,and contributing heavily to the Great Recession. Mozilo later paid over $67 million in fines to settle a series of federal charges related to his conduct at the company.
The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations,as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States,such as bankruptcies and takeovers,and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see Financial crisis of 2007–2008.
Housing prices peaked in early 2005,began declining in 2006.
Observers and analysts have attributed the reasons for the 2001–2006 housing bubble and its 2007–10 collapse in the United States to "everyone from home buyers to Wall Street,mortgage brokers to Alan Greenspan". Other factors that are named include "Mortgage underwriters,investment banks,rating agencies,and investors","low mortgage interest rates,low short-term interest rates,relaxed standards for mortgage loans,and irrational exuberance" Politicians in both the Democratic and Republican political parties have been cited for "pushing to keep derivatives unregulated" and "with rare exceptions" giving Fannie Mae and Freddie Mac "unwavering support".
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.
The government interventions during the subprime mortgage crisis were a response to the 2007–2009 subprime mortgage crisis and resulted in a variety of government bailouts that were implemented to stabilize the financial system during late 2007 and early 2008.
The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. It was characterized by a rise in subprime mortgage delinquencies and foreclosures,and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008,with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
The Budget and Accounting Transparency Act of 2014 is a bill that would modify the budgetary treatment of federal credit programs. The bill would require that the cost of direct loans or loan guarantees be recognized in the federal budget on a fair-value basis using guidelines set forth by the Financial Accounting Standards Board. The bill would also require the federal budget to reflect the net impact of programs administered by Fannie Mae and Freddie Mac. The changes made by the bill would mean that Fannie Mae and Freddie Mac were counted on the budget instead of considered separately and would mean that the debt of those two programs would be included in the national debt. These programs themselves would not be changed,but how they are accounted for in the United States federal budget would be. The goal of the bill is to improve the accuracy of how some programs are accounted for in the federal budget.
Michael Bright served as interim president of Ginnie Mae from July 2017 to January 2019 and currently serves as CEO of the Structured Finance Association (SFA),where he oversees the vision,strategy,convening,and advocacy work of the securitization industry’s largest trade association. President Donald Trump nominated Bright to serve as Ginnie Mae's permanent president in May 2018 but the nomination was never confirmed despite being voted out of the Committee on Banking,Housing,and Urban Affairs by a unanimous voice vote.
