tag:blogger.com,1999:blog-196554259323465442.post8360869604306008574..comments2023-10-27T03:41:13.171-07:00Comments on Warning Signs: Electing the Second ChoiceAlan Carubahttp://www.blogger.com/profile/10901162110385985193noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-196554259323465442.post-88340726320691786622008-09-27T22:26:00.000-07:002008-09-27T22:26:00.000-07:00For interest to your last writer, Alan, below summ...For interest to your last writer, Alan, below summarises the origins of GSE's<BR/><BR/><BR/>The Origins of Government Sponsored Enterprises.<BR/><BR/>To understand the situation, one must study the history of the Federal Home Loan Banks and the Federal National Mortgage Association or Fannie Mae (Freddie Mac's larger sibling). These institutions were products of the New Deal. The mission of the Federal Home Loan Banks, which were created in 1932, was to provide financial support to urban thrift and savings banks. In 1938, the government created Fannie Mae with the express purpose of funding "mortgage loans insured by . . . the Federal Housing Administration." All of this occurred during a time of upheaval in financial markets and were supposedly the remedy needed. Like all such government projects aimed at solving various crises, the institutions outlived their initial purpose and tended to change their focuses to continue operations. Accordingly, in 1968, Fannie Mae was chartered as a GSE and stock was sold to investors. At that time numerous large private mortgage companies purchased stock in the new firm. Likewise, Freddie Mac was chartered as a GSE in 1970. However, Freddie Mac did not become a public company until 1989. <BR/><BR/>Fannie Mae (FNMA or Federal National Mortgage Association), a government-sponsored enterprise (GSE), finances one of every five home loans in the United States. In 1938 this GSE was founded by the federal government with a mission to increase home ownership across the United States. It is subject to congressional oversight via the Office of Federal Housing Enterprise Oversight (OFHEO). Fannie Mae stock (FNM) is (was) actively traded on the New York Stock Exchange and is (was)part of the Standard & Poor's 500 Composite Stock Price Index. <BR/>Fannie Mae may be one of the most ill-fated welfare creations, ever, on the part of the United States government. In the beginning, Fannie Mae's impact was negligible, however, from the outset there were plans to swell Fannie's waistline by expanding her purchasing authority. At about the time the American soldiers were coming home from WWII, Fannie was enabled to purchase loans guaranteed by the Veterans Administration, in addition to the Federal Housing Administration-insured mortgages it was already purchasing. This creation and expansion of a secondary market for mortgages was a vital boost to the supply of lendable money in the United States.<BR/><BR/>Hope that clears a few points.<BR/>References thanks to Prof. Paul Cleveland, Birm. Al. <BR/>Karen De Coster, CPA and Eric Englund.<BR/><BR/>From Clive in Laoag CityAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-196554259323465442.post-44516555668511957942008-09-27T14:01:00.000-07:002008-09-27T14:01:00.000-07:00I am sure if you Google enough, you will find the ...I am sure if you Google enough, you will find the answers you're seeking. That's outside my area of expertise.Alan Carubahttps://www.blogger.com/profile/10901162110385985193noreply@blogger.comtag:blogger.com,1999:blog-196554259323465442.post-42622517754865235122008-09-27T13:56:00.000-07:002008-09-27T13:56:00.000-07:00I read a few articles one of which was from Rush L...I read a few articles one of which was from Rush Limbaugh stating that fannie mai, and freddie mac were established by FDR. Foor the purpose of loaning money to the poor.<BR/><BR/>I am not sure there loaning practices at the begginning but curently they have given greater and greater credit to the the poor.<BR/><BR/>The articles said that Bush Senior wanted to disband those institutioons back when he was in office. The democratically controled congress at the time saw greater value in keeping these lower class lenders open.<BR/><BR/>If such is true then the Democrats would be the ones with failed economic policies. Lending money to people with out forcing the neccissary down payments.<BR/><BR/>I was wondering how tue these articles were? Or maybe you could correct my understanding in this matter of Freddie mac and fannie mae?Unknownhttps://www.blogger.com/profile/03998597007732584956noreply@blogger.com