Fannie Mae Definition & Meaning | Financial Term | CSIMarket
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Glossary

Fannie Mae

Financial Term

Fannie Mae, also known as the Federal National Mortgage Association, is a government-sponsored enterprise (GSE) that was created in 1938 to provide liquidity in the mortgage market. The organization operates in the secondary mortgage market, purchasing and securitizing mortgages from other lenders to provide more funds for mortgage lending and homeownership.

Fannie Mae has a significant impact on the financial industry because it provides access to home financing for many Americans. Through its securitization of mortgages, the organization allows lenders to free up capital that can then be used for additional lending. This, in turn, helps to create a more robust and active mortgage market. Fannie Mae has helped to fuel the U.S. housing market by making home ownership more accessible to millions of Americans.

Fannie Mae*s role in the financial industry expanded in the years leading up to the 2008 financial crisis. At the time, the organization was purchasing and securitizing a significant number of riskier mortgages that were being issued by lenders. This led to significant financial losses, and ultimately, Fannie Mae had to be bailed out by the federal government. In the years since, the organization has been working to stabilize its operations and reduce risks associated with its activities.

Today, Fannie Mae remains an important player in the housing finance industry. The organization continues to purchase and securitize mortgages, providing liquidity and funding for millions of homeowners and prospective buyers across the United States. Fannie Mae*s activities are closely monitored by government regulators, who work to ensure that any risks associated with the organization*s operations are managed appropriately.


Federal National Mortgage Association

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