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and the financial crisis

Manuela Eburi Marissa Saleman. and the financial crisis. Fannie Mae. The Federal National Mortgage Association FNMA Established in 1938 Was converted into a private shareholder-owned corporation in 1968 Held mortgages it bought from mortgage banks. Freddie Mac.

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and the financial crisis

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  1. Manuela Eburi Marissa Saleman and the financial crisis

  2. Fannie Mae • The Federal National Mortgage Association • FNMA • Established in 1938 • Was converted into a private shareholder-owned corporation in 1968 • Held mortgages it bought from mortgage banks

  3. Freddie Mac • Federal Home Loan Mortgage Corporation • FHLMC • Established in 1970 • Became a public entity in 1989 • Securitized mortgages originated by Savings & Loans Associations

  4. Timeline 2003 – March 2008

  5. Timeline April 2008 – August 2008

  6. Timeline August – September 2008

  7. Three Elements for GSE Financing During Conservatorship • Senior Preferred Stock Purchase Agreement • GSE MBS Purchase Program • GSE Credit Facility

  8. Implications of Conservatorship • GSE debt equals more than $5trillion • The US Treasury will have to purchase more stock as more GSE losses are recognized • What if…? • The government never stepped in? • The MBS’s were liquidated? • The government postponed stepping in?

  9. Spectrum of Stability

  10. The Future of Fannie and Freddie • SEC Regulation • Reducing Systemic Risk • Fannie and Freddie are Large Purchasers of Interest Rate Swaps

  11. The Future of Fannie and Freddie is Still Very Uncertain…

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