Business    Borrows at lower rate and lends at higher rate Borrowings are from selling bonds and lendings are to mortgages and Mortgage Based Security A significant portion of income came from guaranty fees it received as compensation for assuming the credit risk .

Carries Fannie Mae's guarantee of timely payment of interest and principal. Fannie Mae provides banks and other financial institutions with fresh money to make new loans. This gives the United States housing and credit markets flexibility and liquidity. Fannie Mae may also securitize mortgages from its own loan portfolio and sell the resultant mortgage-backed security to investors in the secondary mortgage market By purchasing the mortgages. .Business (Contd. either for cash or in exchange for a MBS .)    Buys loans from approved mortgage sellers.

1 billion in net income for the first quarter of 2013‚ fifth consecutive quarterly profit and the largest quarterly pre-tax income in our history.2 billion (2012)  $8.Income Profile Revenue US$ 22.2 trillion (2012) Total equity US$ 7.2 billion (2012) Total assets US$ 3.  Going to pay a dividend of $59.9 billion (2012) Net income US$ 17.4 billion to its owners  .

History (Pre 2000)    Established in 1938 by amendments to the National Housing Act after the Great Depression For the first thirty years following its inception. Fannie Mae held a monopoly over the secondary mortgage market In 1981. Fannie Mae issued its first mortgage pass-through and called it a mortgagebacked security. .

James Lockhart. including granting access to Federal Reserve low-interest loans (at similar rates as commercial banks) On September 7. announced that Fannie Mae was placed into conservatorship. director of the Federal Housing Finance Agency (FHFA).History Contd. . (Post 2000s)     The growth of private-label securitization and lack of regulation resulted in the oversupply of underpriced housing finance and consequently more decrease of the price Depreciation in home prices led to growing losses for the GSEs like Fannie Mae In July 2008. The US Treasury Department and the Federal Reserve took steps to bolster confidence in the corporations. The action was "one of the most sweeping government interventions in private financial markets in decades". 2008.

Controversies     “All the Devils are Here” by Mclean & Nocera Accounting controversy Conflict of interest 2011 SEC charges .

 Nassim Taleb wrote in The Black Swan: "The government-sponsored institution Fannie Mae. seems to be sitting on a barrel of dynamite. . vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events 'unlikely'". when I look at its risks.

Stock Performance Adj Close Price 70 60 50 40 Adj Close Price 30 20 10 0 5/25/2007 5/25/2008 5/25/2009 5/25/2010 5/25/2011 5/25/2012 .

Sign up to vote on this title
UsefulNot useful