Company Overview Visit fanniemae.com website
Fannie Mae is an American public-private corporation, which acts as a government-sponsored enterprise (GSE) and a mortgage investor. Fannie Mae was established in 1938 during the Great Depression to expand the secondary mortgage market by securitizing mortgages in order to provide more money for lenders to offer home loans. The company is named after its founder, Franklin D. Roosevelt's first appointee to the Federal Reserve Board of Governors, James B. "Jim" MacGuire from Camden, New Jersey. Before it was placed into conservatorship under the U.S Government in 2008, it had become one of the country's largest issuers of mortgage-backed securities (MBS).
Fannie Mae provides funding to mortgage companies which need money to offer home loans. This process may sound complicated but it's simple: follow the money . When you or I borrow some cash to buy a house, we have to pay back with interest – usually at least 10%. Those who provide this money expect a good return so they charge borrowers more than what they pay to Fannie Mae.
The important thing to know is that, if someone can't afford their mortgage, then their house (which may be all they have) may end up in foreclosure . Since lenders depend on Fannie Mae for money, they will do everything possible to make sure borrowers won't default on repayment.
So next time you hear about the housing market or want to buy a house, remember Fannie Mae!