StudentShare solutions
Triangle menu
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
  • Home
  • Subjects
  • Miscellaneous
  • Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis

Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis - Essay Example

Extract of sample
Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis

It allowed for banks charging low mortgage interest rates to encourage anyone interested in buying a home. It led to the creating a secondary market for mortgages. In this market, companies like Fannie Mae borrowed money from foreign markets at minimal interest rates since they were financially supported by the US Government. This enabled Fannie Mae to give fixed rate mortgage that have a very low deposit to any home buyer.
Fannie Mae monopolized the secondary market for the first thirty years after its inception. In 1968, the Vietnam War created great fiscal pressure. This led to Fannie Mae’s privatization and its removal from the national budget by President Johnson. This is when it started to operate as a Government Supported Enterprise, GSE. It made profits for its shareholders and at the same time enjoyed being exempted from tax and oversight, despite being backed by the government. To prevent any further monopoly, another Government Supported Enterprise was formed in 1970. It was known as Freddie Mac. These two companies currently command a 90 per cent of the national secondary mortgage market.
GSEs have experienced great growth financially over the years. Their combined asset base is currently at 45 per cent more than those of the biggest bank in the country. However, their combined debt equals 46 per cent of the present national debts. This high growth as well as over-leveraging has caused concerns in the Congress, the SEC and the Justice Department regarding their financial practices.
Freddie Mac and Fannie Mae happen to be the only corporations in the Fortune 500 league that do dot abide by the requirement to furnish the public about any difficulties in finances they undergo. In case they collapse, the taxpayers will have to foot the multi-billion dollar outstanding debt. A recent probe into Freddie Mac by the SEC and the Justice Department discovered accounting errors to the tune ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Federal National Mortgage Association(FANNIE MAE) and Federal Home Essay”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/355018-federal-national-mortgage-associationfannie-mae-and-federal-home-loan-mortgage-corporation-freddie-mac-and-the-housing-crisis
(Federal National Mortgage Association(FANNIE MAE) and Federal Home Essay)
https://studentshare.net/miscellaneous/355018-federal-national-mortgage-associationfannie-mae-and-federal-home-loan-mortgage-corporation-freddie-mac-and-the-housing-crisis.
“Federal National Mortgage Association(FANNIE MAE) and Federal Home Essay”, n.d. https://studentshare.net/miscellaneous/355018-federal-national-mortgage-associationfannie-mae-and-federal-home-loan-mortgage-corporation-freddie-mac-and-the-housing-crisis.
  • Cited: 0 times

Summary

This was part of a deal by President Roosevelt. Private lenders had shied away from making any investments in the home loan market during and shortly after the Great Depression. This led to the national housing market collapsing,…
Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Credit crunch between 2007 - 2009
Banks and investors become wary of providing funds to financial institutions thereby forcefully increasing the cost related to debt products for borrowers. This also affects for individual borrowers as banks become more risk averse towards their loan portfolio.
11 pages (2750 words) Essay
Policy Creation and Implementation in a time of Economic Decline: January 2009
On the economic side there was the desire of financial interests to make profit. US policy promoted both of these sides. It is difficult to place total blame for the resulting economic crisis on either side. Furthermore it is difficult to blame U.S. policy if one were to sanction and promote the positives of the free market system upon which it is based.
7 pages (1750 words) Essay
Mortgage Backed Securities and their role in the economic crisis
MBS are loans that are normally purchased from mortgage companies, banks and originators and then they are assembled into groups by a private entity, a governmental or a quasi governmental. The securities are then offered by the entity. These securities are offered in a process called securitization
4 pages (1000 words) Essay
Impacts of the recent mortgage crisis on the money supply in the United States and the actions of Federal Reserve take in response to the mortgage crisis
Impacts of the recent mortgage crisis on the money supply in the United States and the actions of Federal Reserve take in response to the mortgage crisis Impacts of the recent mortgage crisis on the money supply in the United States and the actions of Federal Reserve take in response to the mortgage crisis.
4 pages (1000 words) Research Paper
Fannie Mae and Freddie Mac Earnings Misstatements
The report disclosed the widespread institutional, organizational, and individual factors that allowed these fraudulent activities to occur, which means that similar recommendations must be applied at these levels to prevent future activities and outcomes from occurring.
8 pages (2000 words) Research Paper
Mortgage Crisis
The current financial downgrade will affect credit card loans, home equity loans and prime mortgages causing a consumer recession. The house prices in 2007 fell by almost 6% and the figure is expected to rise another 15% in 2008. This combined with the unemployment rate which in December was at the highest level at 5% is projected to increase to 5.8% by the end of the year.
2 pages (500 words) Essay
Credit Crunch
dwardian summer" of prosperity and tranquillity and the trench warfare of the credit crunch - the failed banks, the petrified markets, the property markets blown to pieces by a shortage of credit” (Special report: Credit crisis - how it all began, 2008). The major reasons for
2 pages (500 words) Essay
The regulatory measures and reportorial standards pertaining to the banking and financial services industry, in light of the subprime crisis and credit crunch of 2007-2008- Mohammed
system had been increasingly deregulated in an attempt to achieve greater efficiency, but the increasingly liberal policies have progressed to a point when innovative contracts have been implemented with less than diligent study and with a disregard for risk in the face of
28 pages (7000 words) Essay
The impact of financial crisis on five USA companies
Funds derived by other nations from booming oil prices, and cheap manufacturing were reinvested into the United States of America, and it will appear that the Americans decided to use these funds to present self-owned homes to a maximum number of their
11 pages (2750 words) Essay
Discuss the MBS market in the US
The Journal of Portfolio Management, The other journal is what Moves the Mortgage‐Backed Securities Market? Real Estate Economics journal and GSEs, mortgage rates, and secondary market activities. The Journal of Economics
9 pages (2250 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Federal National Mortgage Association(FANNIE MAE) and Federal Home Loan Mortgage Corporation (FREDDIE MAC) and the Housing Crisis for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us