What are Fannie Mae and Freddie Mac?
I know that they handle a lot of money and the federal government is bailing them out. But I don't really understand what they do. Any input?
- LizLv 71 decade agoFavorite Answer
Fannie Mae and Freddie Mac
are (were) PRIVATE companies that buy mortgages already made by banks.
We would go get a loan from a bank for a house. Well thats a lot of money, the banks run out of money so Fannie Mae or Freddie Mac which was made to compete with Fannie Mae, would BUY the loan from the bank, so the banks wouldn't have all their money tied up for over 30 years.
They do this to give the money back to the banks, to make to make new loans.
THEY DONT EVER MAKE THE LOANS FROM THE PUBLIC THEMSELVES they just buy them from the banks once they are made.
Fannie Mae or The Federal National Mortgage Association started in 1938 to bail out banks to free up money (the government bought the loads to give the money back to the bank)
So they buy and sell loans to free up money for the banks basically.
They went to a private company for a long time starting in 1968...
Till just recently when the government put them back under conservatorship... This year, when they ran out of money.
- 1 decade ago
They lend money to buy a house, to people with no exactly great credit
- Ashley ALv 41 decade ago
I just know that they were good loan companies for students.