There has been confusing commentary on Fannie Mae’s and Freddie Mac’s role in the secondary mortgage market and how they might contribute to easing the current disruptions. As the regulator of these companies, one role of the Office of Federal Housing Enterprise Oversight (OFHEO) is to enhance public understanding of the secondary mortgage market. To that end, this Note explains the conforming loan limit and the portfolio caps currently in place for Fannie Mae and Freddie Mac.

​The 12 Federal Home Loan Banks (FHLBanks) are privately capitalized, government-sponsored enterprises. Unlike Fannie Mae and Freddie Mac, which are publicly traded and owned, each FHLBank is a cooperative. In keeping with that cooperative business model, all capital stock in an FHLBank is owned by member institutions, which purchase stock from their FHLBank at par and the FHLBank repurchases or redeems stock from its members at par.

One of the purposes of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (the Safety and Soundness Act) was to address concerns about the affordable housing activities of Fannie Mae and Freddie Mac (the Enterprises). The Enterprises had historically lagged other sectors of the mortgage market when it came to affordable housing. In the Safety and Soundness Act, Congress directed the U.S.

The Housing and Economic Recovery Act of 2008 (HERA) authorized the Secretary of the Treasury to support Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) by purchasing obligations and other securities from those government-sponsored enterprises (collectively, the housing GSEs). HERA gave the Secretary broad authority to determine the conditions and amounts of such purchases.

​The Housing and Economic Recovery Act of 2008 (HERA) authorized the Secretary of the Treasury to support Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) by purchasing obligations and other securities from those government-sponsored enterprises (collectively, the housing GSEs). HERA gave the Secretary broad authority to determine the conditions and amounts of such purchases.

Theory and Evidence from U.S. States

Author:

Andra C. Ghent, Zicklin School of Business, Baruch College
Marianna Kudlyak, Research Department, Federal Reserve Bank of Richmond

Defaults, Self-curses and Securitization

Author:

Manuel Adelino, MIT Sloan
Paul S. Willen, Federal Reserve Bank of Boston
Kristopher Gerardi, Federal Reserve Bank of Atlanta

Effects of Origination Channel and Information Falsification on Mortgage Delinquency

Author:

​Wei Jiang, Columbia Business School
Ashlyn Aiko Nelson, Indiana University
Edward Vytlacil, Yale University

Author:

Michael LaCour-Little, California State University
Jing Yang, California State University