Tag Archives: Fannie Mae

Fannie Mae looking to take on more risk

  Back in 2008, the government-sponsored company known as Fannie Mae was taken over by the government because it was suffering so many losses as a result of being too easy on loan requirements and approval. Fannie Mae issues mortgage bonds to investors at a certain rate of return and then uses the money that it receives from the bond issuance to buy mortgages from companies at higher rates of return and keeps the difference as profits. Fannie Mae and it smaller sister company, Freddie Mac, own more than half of the $10 trillion residential mortgage market. Fannie Mae and …

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