House Values By Address

Addressing misconceptions financial crisis
span style = "font-size: 12pt; font-family:" Times New Roman ""> Now that entities such as Fannie Mae and Freddie Mac were pushed to the front of national media coverage because of their rapid chess giving rise to a multitude of emergency congressional hearings, meetings of cabinet, press conferences and government conervatorship ultimate, many Americans have been left confused as to what role these two companies actually played to cause financial crisis of our country. Both Fannie and Freddie are public companies commonly called "commercial" or "GSE" and are the largest buyers and insurers of mortgages in the United States. These two entities owned or supported a total of 5.3 trillion dollars in mortgage debt in 2008, about half the outstanding mortgages in the country. Fannie and Freddie were viewed as "government sponsored" because they were originally created and funded by the federal government, but shortly after began to operate as public companies with their stock traded on the open market.

The Government Sponsored Enterprises

Fannie Mae was created as part of the 1938 Federal Housing Act which millions of families in middle and low income could not afford to buy or keep their homes after the Great Depression. After the depression, depleted cash reserves of most banks, potential buyers have been faced with exorbitant interest rates that mortgage lenders are wary of the game with a precious asset. The Federal National Mortgage Association (Fannie Mae) was created to buy mortgages from the Bank to allow banks to free up more reserves to generate more loans to affordable interest rates. Fannie then pools the mortgages and sells them to investors, which effectively makes the intermediary between banks and investors.

In 1968, Fannie Mae became a public company in order to reduce government involvement and later allowed to mortgage securities by Fannie to be sold on the open market. Shortly thereafter, the government created the Federal Home Loan Mortgage Corporation (Freddie Mac) in 1970 to further expand the secondary mortgage market and provide competition for Fannie Mae. The creation of Fannie Mae and Freddie Mac has often been cited as the reason for the dramatic increase in ownership in America by 43% in 1940 to over 70% today.

Despite the fact that a significant proportion of mortgages now owned or insured by Fannie Mae and Freddie Mac are traditionally strong U.S. mortgages, these two public entities lost a combined $ 5.1 billion in 2007 and 2.4 billion dollars first quarter of 2008 amid troubled housing and financial sector. This rapid depletion of reserves comes at a time when it became increasingly difficult to sell asset-backed securities to investors to replenish Fannie and Freddie's financial reserve cushion. Consequently, the value of the shares of Fannie and Freddie were allowed to fall to levels that ultimately forced the federal government to become intimately involved in the GSEs by placing them under supervision and infusing them billions of dollars to keep their operating .

The impact on Wall Street

So how Fannie and Freddie's current failures contribute to our country's financial situation? The year 2008 being an election year, it became common practice to take all blame for the economic problems of the United State in the President of the nation over the past eight years. However, many budget problems that hit both Wall Street and Main Street home before the Bush administration never reached the White House. In fact, it was as early as 1999, the Clint.