Fannie Mae

Definition of "Fannie Mae"

Written by

Joan  Means

Century 21 Bradley Realty

Wondering who is this Fannie Mae person that your real estate agent always mentions when the subject about mortgage is brought up?

Fannie Mae is not a person, nor a Woody Allen female character – but the way people commonly refer to The Federal National Mortgage Association (FNMA).

But, to be fair, although it is not a person, to better understand Fannie Mae definition we need to tell its story as if we were telling a person’s life:

Fannie Mae was founded as a government-sponsored enterprise in 1938 as part of Franklin Delano Roosevelt administration’s “New Deal” on the aftermath of the Great Depression. The idea behind Fannie Mae was to inject federal money into privately owned banks to finance home mortgages and raise the levels of home ownership after so many Americans had their homes foreclosed on due to defaulting because of the economical crisis. Fannie Mae was an aggressive second mortgage market supporter that connected their financial injection with the obligation of buying Federal Housing Administration (FHA) insurance. So much so, it basically held a second mortgage monopoly for over 30 years.

But with the economy re-established, The Federal National Mortgage Association has been through a lot of changes. It became a mixed-ownership corporation in the 1950s and eventually turned into a government-sponsored, publicly traded and privately held corporation spawning Ginnie Mae (Government National Mortgage Association) and the privately held corporation that kept the “Fannie Mae” name without the “Federal National Mortgage Association”.

Yes, it’s like a family, right? You have Fannie Mae, younger sister Ginnie Mae and love interest on that love-hate relationship Freddie Mac. The name of this sitcom? “The Mortgages”?

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