Fannie Mae

Fannie Mae was founded in 1938 through President Franklin D. Roosevelt's New Deal. Like it's "brother company" Freddie Mac, it is a publicly traded financial institution chartered by congress to provide financing to mortgage lenders.

In August 2008, the ongoing mortgage crisis led to a steep decline in the value of Fannie Mae stock.¹ It was announced on September 7 that both Fannie and Freddie would be placed under the guardianship of the federal government, in order to minimize risk to the U.S. housing market.²

Fast Facts

1. Stock symbol: NYSE: FNM
2. Full Name: Federal National Mortgage Association
3. Annual revenue (2007): $43.71 Billion³
4. Founder: Franklin D. Roosevelt
5. Year Established: 1938
6. Industry: Credit Services
7. Phone: (202) 752-7000
8. HQ: Washington DC
9. Chairman: Stephen B. Ashley
10. President and CEO: Daniel H. Mudd
11. CFO: Stephen M. Swad
12. Staff: 6,400⁴
13. Products: Financial Services

Key Dates

1. 1938: Fannie Mae was founded
2. 1968: Converted to private corporation
3. 2004: Accounting practices under investigation
4. 2006: Charges filed against Franklin Raines, J. Timothy Howard and Leanne G. Spencer

Nationalization Rumors

On July 11, 2008, U.S. Department of Treasury Secretary Henry Paulson announced that the Federal Government would not take over mortgage guarantors Fannie Mae and Freddie Mac. Experts maintain that the institutions are capable of covering their own losses in the wake of the mortgage crisis, and that a government assumption of their liabilities would double the U.S. national debt.⁵

Rescue Plan

On July 14, 2008 a rescue plan for Fannie Mae and Freddie Mac was announced by the U.S. Treasury. Under the plan, Congress would lend money to the companies, extend their credit lines and buy shares of equity.⁶

On July 30, 2008, President George W. Bush signed legislation granting the Treasury Department the power to lend money to or buy stock in Fannie Mae and Freddie Mac. The limit on loans that Fannie Mae and Freddie Mac are authorized to buy was raised to $625,000 and a new affordable housing fund will be founded using the profits of the two companies.⁷⁸

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