Fannie Mae and Freddie Mac
A combination of private enterprise and public backing
The Federal National Mortgage Association, nicknamed Fannie Mae, and the Federal Home Mortgage Corporation, nicknamed Freddie Mac and operating since 1968.
The nicknames says it all.
Although the two companies are privately owned and operated by shareholders, they are protected financially by the support of the Federal Government. These protections include access to a line of credit through the U.S. Treasury, exemption from state and local income taxes and exemption from SEC oversight.
A recent accounting scandal at Freddie Mac resulted in the replacement of three of the company's top executives and led to mounting concerns over the privileged status these executives enjoy in the marketplace--generating profits for stock holders while enjoying the benefits of exemption from taxation and oversight as well as implied government backing--corruption and cronyism.
Fannie Mae and Freddie Mac are the only two Fortune 500 companies not required to inform the public about any financial difficulties they may be having. In a financial collapse within either of these companies, U.S. taxpayers could be held responsible for hundreds of billions of dollars in outstanding debts.
Corruption and cronyism, cronyism is the practice of favoring one's close friends, esp. in political appointments.
Now you know where a large portion of your U.S. tax dollars are going.
The Government Takes Over Fannie Mae and Freddie Mac?
The US government's plan to rescue Fannie Mae?...
Beware! Avoid mortgage fraud: Know the two main sources.
Fannie Mae follows sound underwriting standards, expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market.
Freddie Mac makes homeownership and rental possible for more people than ever before.
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