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Thursday, January 28, 2010

CRS Issue Statement on Fannie Mae, Freddie Mac, and Other GSEs

N. Eric Weiss, Coordinator
Specialist in Financial Economics

Government-sponsored enterprises (GSEs) are congressionally-chartered financial institutions provided with special privileges to carry out narrow missions of critical public policy importance. Three GSEs—Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System—provide liquidity to home mortgages. The Farm Credit System and Farmer Mac, which are concerned with agricultural and certain rural housing loans, are also GSEs. 

In September 2008, the federal government placed Fannie Mae and Freddie Mac in conservatorship. Since then, Treasury has purchased more than $100 billion in preferred stock and the Federal Reserve has purchased more than $1 trillion in mortgage-backed securities. These actions and the risk to the economy represented by the more than five trillion dollar combined mortgage guarantees of the three housing GSEs have meant increased congressional focus directed at how they are regulated and how they are operating. New legislation and oversight hearings are likely in the second session of the 111th Congress.

Date of Report: January 12, 2010
Number of Pages: 3
Order Number: IS40298
Price: $7.95

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