Fannie Mae and Freddie Mac Shares on Their Way to Zero

Fannie Mae and Freddie Mac made the giant crazy sized long running American real estate bubble all possible. Released by congress from capital-ratio requirements and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages, which kept home mortgage financing flowing to a lot of people who had no ability to repay the mortgages. Today, Freddie or Fannie finance more than 80% of all new mortgages in the United States.

Fannie Mae purchases and guarantees mortgages that meet its funding criteria. Through this process it secures mortgages to form mortgage-backed securities (MBS). Fannie Mae is not required to file regular financial reports with the Securities and Exchange Commission (SEC), although in 2002 it began to do so under pressure from SEC and Congressional investigators. In 2004, the SEC required Fannie Mae to re