Fannie Mae (FNMA) is a US government-sponsored enterprise founded in 1938 to expand the secondary mortgage market. Its corporate journey includes pivotal shifts from government agency to publicly traded company, innovations in mortgage securitization, and a landmark conservatorship during the 2008 financial crisis.
Established as a federal agency under the New Deal to increase liquidity in the housing market by purchasing FHA-insured mortgages. #history #housing
Congress revises Fannie Mae's charter, making it a mixed-ownership corporation with both government and private shareholders, transitioning from a fully government-run entity. #government #finance
Fannie Mae becomes a shareholder-owned company under the Housing and Urban Development Act, removing it from the federal budget while retaining government sponsorship. #privatization #GSE
Fannie Mae issues its first mortgage-backed security (MBS), pioneering the securitization of home loans and creating a new market for mortgage investments. #securitization #innovation
David Maxwell becomes CEO and leads a turnaround, introducing profit-driven policies and expanding role in conventional loans, laying groundwork for future growth. #leadership #CEO
Fannie Mae issues its first global bond, raising capital from international investors and expanding its funding sources beyond the U.S. #global #finance
James A. Johnson takes over and steers Fannie Mae into aggressive growth, increasing its portfolio and political influence. #leadership #CEO
Congress requires Fannie Mae to meet affordable housing goals, increasing purchases of loans to low- and moderate-income borrowers. #housing #policy
Franklin Raines, former OMB director, becomes CEO and accelerates subprime lending exposure, leading to record profits but elevated risk. #leadership #CEO
Fannie Mae admits to accounting errors totaling $9 billion, revealing improper hedging and earnings manipulation; OFHEO investigation begins. #scandal #accounting
Following the accounting scandal, Raines resigns amid pressure from regulators, and OFHEO imposes stricter oversight. #leadership #scandal
Daniel Mudd takes over as CEO, tasked with restoring investor confidence and resolving accounting issues. #leadership #CEO
OFHEO orders Fannie Mae to hold 30% more capital due to financial and operational weaknesses, limiting its ability to grow. #regulation #capital
Rising defaults in subprime mortgages cause Fannie Mae to report a $2 billion quarterly loss, its first in years, and share price plummets. #crisis #losses
To stabilize the housing market, OFHEO reduces Fannie Mae's capital surplus requirement, allowing it to inject liquidity during the crisis. #regulation #crisis
The U.S. Treasury announces a plan to lend to Fannie Mae and Freddie Mac if needed, as mortgage losses deepen. #government #bailout
The Federal Housing Finance Agency (FHFA) places Fannie Mae into conservatorship, effectively nationalizing the company with Treasury injecting up to $100 billion. #conservatorship #crisis
As part of conservatorship, Daniel Mudd is ousted and replaced by Herbert M. Allison, a Treasury appointee. #leadership #CEO
The Treasury raises its funding commitment to Fannie Mae to $200 billion as losses mount, ensuring it can continue operations. #government #bailout
Fannie Mae's common stock is delisted from the New York Stock Exchange after prolonged low share prices, trading over-the-counter. #stockmarket #delisting
FHFA files lawsuits against major banks for misrepresenting mortgage-backed securities sold to Fannie Mae during the housing bubble. #litigation #banks
Fannie Mae agrees to a net worth sweep, directing all future profits to the Treasury in exchange for preferred shares, limiting private shareholder value. #government #profits
Fannie Mae posts a record $84 billion annual profit thanks to improved housing market, allowing it to repay its government bailout in full. #profit #repayment
FHFA releases a plan to wind down conservatorship and reform the housing finance system, but no major legislative action follows. #reform #GSE
FHFA proposes a single mortgage-backed security structure for Fannie Mae and Freddie Mac to improve market liquidity. #securitization #policy
As part of the sweep agreement, Fannie Mae's capital buffer is reduced, leaving it with no retained earnings and reliant on Treasury support. #capital #government
FHFA director halts further reduction of the capital buffer, citing uncertainty about housing finance reform. #regulation #policy
The Treasury Department releases a framework for reforming Fannie Mae and Freddie Mac, including ending conservatorship. #reform #GSE
FHFA allows Fannie Mae to retain a capital buffer up to $20 billion, reversing the net worth sweep and enabling capital accumulation. #capital #regulation
In response to COVID-19, Fannie Mae provides forbearance options for homeowners and suspends foreclosure evictions. #pandemic #housing
Mark Calabria, who pushed for GSE reform, leaves FHFA after change in administration, reducing momentum for privatization. #leadership #FHFA
The U.S. Supreme Court rules that the structure of FHFA (with a single director removable only for cause) is unconstitutional but does not invalidate past actions. #legal #regulation
Fannie Mae releases a plan to reduce racial and ethnic disparities in homeownership, committing to billions in financing for underserved communities. #equity #housing
FHFA finalizes a rule requiring Fannie Mae to hold significantly more capital, aligning with Basel III standards and preparing for eventual exit from conservatorship. #regulation #capital
Despite ongoing reform discussions, Fannie Mae continues to operate under FHFA conservatorship, maintaining its dual role as market stabilizer and profit generator for Treasury. #conservatorship #future