At the same time, banks aren’t issuing MBSs at anywhere close to the same volume as they did prior to the crisis, because investor demand for private-label MBSs has dried up. It means if losses mount the old shareholders will probably lose everything. Fannie Mae and Freddie Mac, which have been under government conservatorship since the federal takeover in September 2008, will only buy qualified mortgages for mortgage bonds.
#FANNIE MAE FORECLOSURES SINCE SEPTEMBER 2008 MAC#
Existing shareholders in Freddie Mac and Fannie Mae, will be the last to be reimbursed. It is to prevent the two big mortgage companies going bankrupt that the Fed effectively nationalised the Bank. According to a Wall Street Journal story, without lawmakers’ intervention the maximum number of loans backed by Fannie Mae and Freddie Mac. The two mortgage lenders supply funds to nearly all major US banks and mortgage companies. They tried to raise money on the financial markets, but, this was becoming difficult because nobody wanted to lend them money with more losses still to come. Between April and June they lost over $3bn. The markets were concerned that the big two banks were at risk of becoming insolvent under the weight of bad mortgage loans. According to Fannie Mae’s press release, this suspension will take place from Novem Janufor owner occupied, single family dwellings for home owners who have not filed for bankruptcy and who has missed three or more payments. But could you explain what do you mean by "The banks need to be nationalised because of an unprecedented rise in mortgage delinquencies (an American term for mortgage defaults) leaving investors nervous about whether they could survive." Who could survive? The investors, or the banks. Readers Question: Interesting article ( Nationalisation of Freddie Mac and Fannie Mae ).