Replies to post #543797 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

from wiki

but securities law - securities descriptions all agree with the end comment - at the very end of this

Historically, most housing loans in the early 1900s in the USA were short term mortgage loans with balloon payments.[6] The Great Depression wrought havoc on the U.S. housing market as people lost their jobs and were unable to make payments. By 1933, an estimated 20 to 25% of the nation's outstanding mortgage debt was in default.[7] This resulted in foreclosures in which nearly 25% of America's homeowners lost their homes to banks. To address this, Fannie Mae was established by the U.S. Congress in 1938 by amendments to the National Housing Act[8] as part of Franklin Delano Roosevelt's New Deal. Originally chartered as the National Mortgage Association of Washington, the organization's explicit purpose was to provide local banks with federal money to finance home loans in an attempt to raise levels of home ownership and the availability of affordable housing.[9] Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration (FHA) insured mortgages.[10] For the first thirty years following its inception, Fannie Mae held a monopoly over the secondary mortgage market.[9] Other considerations may have motivated the New Deal focus on the housing market: about a third of the nation's unemployed were in the building trade, and the government had a vested interest in getting them back to work by giving them homes to build.[11]
Fannie Mae was acquired by the Housing and Home Finance Agency from the Federal Loan Agency as a constituent unit in 1950.[12] In 1954, an amendment known as the Federal National Mortgage Association Charter Act[13] made Fannie Mae into "mixed-ownership corporation", meaning that federal government held the preferred stock while private investors held the common stock;[8] in 1968 it converted to a privately held corporation, to remove its activity and debt from the federal budget.[14]

In the 1968 change, arising from the Housing and Urban Development Act of 1968, Fannie Mae's predecessor (also called Fannie Mae) was split into the current Fannie Mae and the Government National Mortgage Association ("Ginnie Mae").


Ginnie Mae, which remained a government organization, buys FHA-insured mortgage loans as well as Veterans Administration (VA) and Farmers Home Administration (FmHA) insured mortgages.

As such, (EDIT BECAUSE IT REMAINED A GOV ORGANIZATION) Ginnie Mae is the only home-loan agency explicitly backed by the full faith and credit of the United States government.[15]