To address this, Fannie Mae was established by the U.S. This resulted in foreclosures in which nearly 25% of America's homeowners lost their homes to banks. By 1933, an estimated 20 to 25% of the nation's outstanding mortgage debt was in default. housing market, as people lost their jobs and were unable to make payments.
Historically, most housing loans in the early 1900s in the United States were short term mortgage loans with balloon payments. History Background and early decades Ī view, from the southwest, of the Federal National Mortgage Association's (Fannie Mae's) Reston, Virginia facility In 2022, Fannie Mae was ranked number 33 on the Fortune 500 rankings of the largest United States corporations by total revenue. Its brother organization is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac. Founded in 1938 during the Great Depression as part of the New Deal, the corporation's purpose is to expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations (or "thrifts").
The Federal National Mortgage Association ( FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company.
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