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Government Sponsored Enterprises – an Introduction

In the past ninety plus years, the U.S. Congress has moved to create a series of Government Sponsored Enterprises (GSEs)  focused on providing financial services to assist homeowners and farmers. Starting with farming economic issues proceeding the First World War, the dramatic impact of the great Depression during the 1930’s and the rapid expansion of suburban America, Congress has sought vehicles to help secure and expand homeownership and improve financing for rural farmers, once seen as the economic backbone of the nation. The goal of these institutions was to reduce interest rates for these specific borrowing groups and provide a measure of economic stability. With the decrease in the number of  family owned farms and  dramatic changes in turn of the century rural life, the mortgage borrowing services have become by far the largest portion of the GSEs operations.

The GSEs have created a secondary market for farm and housing loans through a securitization system, which allows primary market debt issues to be bought and traded by investors. Through the securitization system demand for the debt securities drives up their trading price, which in tern lowers their interest rates. The result is the secondary market in mortgage loans gives household borrowers lower fixed rate loans, removes credit risk from banks  and provides securitized securities for investors.

The structure of the GSEs are varied with some owned by the Federal government; some are publicly owned;  and some are owned by the corporations that use their services. Their lenders grant them extraordinary low rates, and the buyers of their securities grant them extraordinary high prices, as the implicit involvement of the Federal government gives them a sense of financial security.

- Federal Home Loan Mortgage Corporation (Freddie Mac) (1970)

- Federal National Mortgage Association (Fannie Mae) (1938)

- Government National Mortgage Association (Ginnie Mae) (1968)

- Federal Farm Credit Banks (1916)

- Federal Agricultural Mortgage Corporation (Farmer Mac) (1988)

- Federal Home Loan Bank Section (1932)

 

Profiles of Government Sponsored Enterprises (GSEs)

Fannie Mae Releases Monthly Summary for May

June 25, 2007 By: Fannie Mae

The monthly summary report contains information about our monthly and year-to-date activity for portfolio commitments, portfolio purchases, sales and liquidations, guaranteed securities and mortgage loans, and delinquency rates.


Fannie Mae (Federal National Mortgage Association)

October 26, 2006

In 1938, the Federal government established Fannie Mae to expand the flow of mortgage money by creating a secondary market. Fannie Mae was authorized to buy Federal Housing Administration (FHA)-insured mortgages, thereby replenishing the supply of available mortgage money. In 1968, Fannie Mae became...


Daniel H. Mudd, President and Chief Executive Officer of Fannie Mae

October 26, 2006

Daniel H. Mudd is President and Chief Executive Officer of Fannie Mae and a Director of the company. Previously, Mudd served as Chief Operating Officer, responsible for management of single-family and multifamily lender origination, credit, housing initiatives, systems, human resources, budgeting, a...


Freddie Mac (Federal Home Loan Mortgage Corporation)

October 26, 2006

Congress chartered Freddie Mac in 1970 as a private company to provide a continuous and low-cost source of capital to finance America's housing. Federal oversight of Freddie Mac is focused on two main areas – its housing mission, and its financial safety and soundness.


Richard F. Syron, Chairman and Chief Executive Officer of Freddie Mac

October 26, 2006

Richard F. Syron is chairman and chief executive officer of Freddie Mac, a New York Stock Exchange traded company and the second largest source of mortgage financing in the United States. Syron joined Freddie Mac in December 2003 from Thermo Electron, an S&P 500 company with 11,000 employees doing ...


Office of Federal Housing Enterprise Oversight (OFHEO)

October 26, 2006

The Office of Federal Housing Enterprise Oversight (OFHEO) was established as an independent entity within the Department of Housing and Urban Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The Office is headed by a Director appointed by the President for ...


James B. Lockhart III, Director of the Office of Federal Housing Enterprise Oversight (OFHEO)

October 26, 2006

James B. Lockhart III is the Director of the Office of Federal Housing Enterprise Oversight (OFHEO). He was nominated by President George W. Bush to become the Director of OFHEO, and was confirmed by the U.S. Senate on June 15, 2006. Lockhart also served as Deputy Commissioner of Social Security, a...


Ginnie Mae (Government National Mortgage Association)

October 26, 2006

In 1934, during the depths of the Depression, Congress passed the National Housing Act to strengthen a deeply troubled housing market. An important element of this legislation was to make mortgage funds available to more Americans by protecting lenders from the risk of default. In 1938, Congress ame...


Robert M. Couch, President, Ginnie Mae (Government National Mortgage Association)

October 26, 2006

Robert M. Couch was confirmed by the United States Senate on June 15, 2006, as President of the Government National Mortgage Association. Couch administers Ginnie Mae's $404 billion mortgaged-backed securities program and $125 billion REMIC program and oversees its mission to make affordable housing...


Federal Farm Credit Bank System (Corporation)

October 26, 2006

The Farm Credit System is a nationwide network of borrower-owned lending institutions and affiliated service entities that lends to agricultural and rural America. The System is the oldest Government-sponsored enterprise (GSE) created when Congress established authority for certain predecessor entit...


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Reports Issued By Government Sponsored Enterprises (GSEs)

KBW Calls for Comprehensive Reform of Government Sponsored Enterprises By: BusinessWireJuly 21, 2010

NEW YORK--(BUSINESS WIRE)--KBW, Inc. (NYSE: KBW) a full service investment bank that specializes in the financial services sector, has urged the Obama Administration to review the nation’s housing finance system and offered its own plan for comprehensive reform of the government-sponsored enterprise...

Category: Subprime Lending, Mortgage Banking & Lending, Housing, Regulatory Affairs, GSEs-Government Sponsored Enterprises, Focus On Homepage, CIN RSS Feeds, CIN RSS

Countrywide made preferential loans to Fannie Mae and Freddie Mac employees, congressional panel finds By: LA TimesJuly 21, 2010

A congressional investigation has found that Countrywide Financial Corp. made 173 preferential mortgage loans to employees of housing finance giants Fannie Mae and Freddie Mac, which purchased many of the company's loans. The mortgages were made as part of Countrywide's VIP program, known informally...

Category: Subprime Lending, Stakeholders News, Economic & Social Justice, Mortgage Banking & Lending, Housing, GSEs-Government Sponsored Enterprises, SOS - Focus On, Focus On Homepage, CIN RSS Feeds, CIN RSS

Freddie Mac, New Vista, REDC to Auction 135 Homes on August 7 in Phoenix to Boost First-Time Homeownership By: Freddie MacJuly 20, 2010


McLean, VA – Freddie Mac (OTC:FMCC), real estate auction specialist REDC, and New Vista have announced plans to auction 135 HomeSteps® REO homes to individual homebuyers at the Phoenix Convention Center on August 7, 2010. Almost a third of the homes are being set-aside for an auction to first-time b...

Category: Housing, Mortgage Banking & Lending, Stakeholders News, GSEs-Government Sponsored Enterprises, AZ State News, Focus On Homepage, CIN RSS, CIN Billboard

Thousands Bid, 207 Families Buy Homes at Freddie Mac Auctions in Las Vegas, Riverside/San Bernardino Counties By: Freddie MacApril 30, 2010

Successful Auctions for First Time Buyers, Owner-Occupants Combine Federal Neighborhood Stabilization Funds and HomeSteps® Closing Cost Assistance, 2-Year Home Warranty - McLean, VA – Freddie Mac (NYSE:FRE) has reported that it had sold 207 HomeSteps® REO homes to first time buyers and other owner-o...

Category: NV State News, CA State News, GSEs-Government Sponsored Enterprises, Subprime Lending, Economic & Social Justice, Housing, Stakeholders News, SOS - Focus On, Focus On Homepage, CIN RSS Feeds

Fannie and Freddie Continue to Struggle, Lawmakers Told By: New York TimesOctober 9, 2009


In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.

Category: Subprime Lending, Stakeholders News, Mortgage Banking & Lending, Regulatory Affairs, Housing, Economy and You, GSEs-Government Sponsored Enterprises, SOS - Focus On, CIN RSS Feeds, CIN RSS

FHFA Refinance Report Underscores Impact of Interest RatesBy: Federal Housing Finance Agency (FHFAOctober 1, 2009


Fannie Mae and Freddie Mac refinanced more than 3.2 million mortgage loans in 2009 through August of this year. In the month of August alone, nearly 360,000 mortgages were refinanced. The numbers were announced today by Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA)...

Category: Subprime Lending, Stakeholders News, Community Investment, Economic & Social Justice, Housing, Economy and You, GSEs-Government Sponsored Enterprises, Focus On Homepage, CIN Billboard

Making Home Affordable Program - Statement of Eric J. Schuppenhauer, Senior Vice President, Fannie Mae By: Fannie MaeSeptember 25, 2009

Members of the Congressional Oversight Panel, thank you for the opportunity to discuss Fannie Mae’s work to carry out the Administration’s Making Home Affordable Program and otherefforts to help borrowers avoid foreclosure and refinance their mortgages.

Category: Subprime Lending, Stakeholders News, Mortgage Banking & Lending, Housing, SOS - Focus On, Focus On Homepage, CIN RSS Feeds, CIN RSS, GSEs-Government Sponsored Enterprises

OFHEO Releases “Mortgage Markets and the Enterprises in 2006”By: Office of Federal Housing Enterprise OversightJune 26, 2007

WASHINGTON, DC — James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight (OFHEO) today released “Mortgage Markets and the Enterprises in 2006,” an annual research paper that reviews developments in the primary and secondary mortgage markets and the financial performance of ...

Category: GSEs-Government Sponsored Enterprises

Securitized Jumbo Mortgages: 1986 - 2005By: Everson W. Hull, Office of Federal Housing Enterprise OversightJune 7, 2007

This paper provides a historical review of the characteristics of jumbo mortgages financed through securitization. The research uses loan-level data on a large proportion of all jumbo mortgages originated from 1986 through 2005 and later securitized. That sample permits detailed analysis of variatio...

Category: GSEs-Government Sponsored Enterprises

Current Challenges To GSE Regulatory OversightBy: JAMES B. LOCKHART III, DIRECTOR, OFHEOApril 23, 2007

Thank you for asking me to be your lead-off batter this morning at ICBA’s Policy Summit. I recognize the importance of your almost 5,000 members to the housing finance system. I started my career at what was then considered a regional bank, the First National Bank of St. Paul, Minnesota with $1 bill...

Category: GSEs-Government Sponsored Enterprises

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