22 Facts About Fannie Mae

Federal National Mortgage Association, commonly known as Fannie Mae, is a United States government-sponsored enterprise and, since 1968, a publicly traded company.

In 2022, Fannie Mae was ranked number 33 on the Fortune 500 rankings of the largest United States corporations by total revenue.

Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration insured mortgages.

Fannie Mae was acquired by the Housing and Home Finance Agency from the Federal Loan Agency as a constituent unit in 1950.

In 1981, Fannie Mae issued its first mortgage pass-through and called it a mortgage-backed security.

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Ginnie Fannie Mae had guaranteed the first mortgage pass-through security of an approved lender in 1968 and in 1971 Freddie Mac issued its first mortgage pass-through, called a participation certificate, composed primarily of private mortgage loans.

In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the Community Reinvestment Act of 1977.

McCain pointed out that Fannie Mae's regulator reported that profits were "illusions deliberately and systematically created by the company's senior management" in his floor statement giving support to S 190.

In May 2013, Fannie Mae announced that it is going to pay a dividend of $59.

Fannie Mae makes money partly by borrowing at low rates, and then reinvesting its borrowings into whole mortgage loans and mortgage backed securities.

Fannie Mae is able to borrow very inexpensively in the debt markets as a consequence of market perception.

Fannie Mae earns a significant portion of its income from guaranty fees it receives as compensation for assuming the credit risk on mortgage loans underlying its single-family Fannie Mae MBS and on the single-family mortgage loans held in its retained portfolio.

Fannie Mae is a purchaser of mortgages loans and the mortgages that secure them, which it packages into mortgaged-backed securities.

Fannie Mae buys loans from approved mortgage sellers and securitizes them; it then sells the resultant mortgage-backed security to investors in the secondary mortgage market, along with a guarantee that the stated principal and interest payments will be timely passed through to the investor.

In order for Fannie Mae to provide its guarantee to mortgage-backed securities it issues, it sets the guidelines for the loans that it will accept for purchase, called "conforming" loans.

Fannie Mae produced an automated underwriting system tool called Desktop Underwriter which lenders can use to automatically determine if a loan is conforming; Fannie Mae followed this program up in 2004 with Custom DU, which allows lenders to set custom underwriting rules to handle nonconforming loans as well.

Originally, Fannie Mae had an 'explicit guarantee' from the government; if it got in trouble, the government promised to bail it out.

Fannie Mae became a private corporation, chartered by Congress and with a direct line of credit to the US Treasury.

Fannie Mae received no direct government funding or backing; Fannie Mae securities carried no actual explicit government guarantee of being repaid.

In late 2004, Fannie Mae was under investigation for its accounting practices.

Fannie Mae was expected to spend more than $1 billion in 2006 alone to complete its internal audit and bring it closer to compliance.

On May 29,2013, the Los Angeles Times reported that a former foreclosure specialist at Fannie Mae has been charged but pleaded "not guilty" to accepting a kickback from an Arizona real estate broker in a Santa Ana Federal court.