East Bay Realty Pro Blog

Freddie Mac (The Federal Home Mortgage Association) and Fannie Mae (The Federal National Mortgage Association) have functioned since 1968 as GSEs (government sponsored enterprises). Until seized by the Federal government in September 2008, the two companies were privately owned and operated by shareholders but were financially backstopped by the Feds.

House Financial Services Committee Chairman Barney Frank said the other day that the committee will recommend abolishing Freddie and Fannie in their present form and creating a different system of financing home loans. This is important because the “secondary mortgage market,” which resulted from the establishment of Fannie Mae in 1938, is the backbone of financing for U.S. housing.

The exact future is unknown and probably will not be determined for awhile, but change is sure to come. For more information, see “Frank: End Freddie, Fannie As Now Cast.”