What Is Freddie Mac And Fannie Mae

Troubled mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) are being placed in a government conservatorship. What does that mean for traders on Monday? Contrarian investing means going against the trend — buying low when everyone’s selling and selling high when everyone’s buying.

 · Even though Fannie Mae and Freddie Mac are profitable, the government is still on the hook, so it’s still at risk. In fact, the Congressional Budget Office recently put out a.

Fannie Mae and Freddie Mac are government-sponsored enterprises (gses) – i.e., private companies sponsored by the government – in the U.S. home mortgage industry. Though separate companies that compete with one another, they have the same business model, wherein they buy.

Freddie Mac is similar to Fannie Mae. It was established as a government-sponsored agency to purchase bank loans in the secondary market and sells foreclosures through homesteps.com. It allows banks to secure more funding so they can continue making home loans to borrowers.

Fannie Mae and Freddie Mac are two entities established by the government to boost the housing market. Fannie Mae stands for the Federal National Mortgage Association. Freddie Mac is the Federal Home Loan Mortgage Corporation. These organizations are not only different in their genesis, but also.

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Shares of mortgage finance giants Fannie Mae (NASDAQOTH: FNMA) and Freddie Mac (NASDAQOTH: FMCC) are dropping again today, down by 11% and 9%, respectively, as of 11 a.m. EST. This comes on the heels.

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Freddie Mac Photo: Getty Images. Are you behind on the whole Fannie mae-freddie mac affair? Maybe you were out of the office last Friday and haven’t had a chance to catch up. Or perhaps you did try to catch up, but an ocean of words and opinions fell upon you.

For Freddie and Fannie (as they’re commonly known) to purchase a mortgage, it must conform to their loan limits, which for 2010 were $417,000 for a single-family home in a "general" area and up to $1.8 million for high-cost areas like parts of Hawaii [source: Fannie Mae].After Freddie and Fannie purchase mortgages from lenders, they sell them as securities in the bond market.