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Federal National Mortgage Association
(redirected from Federal National Mortgage Association Charter Act)

   Also found in: Legal, Encyclopedia, Wikipedia, Hutchinson 0.03 sec.
Federal National Mortgage Association (Fannie Mae)
A publicly owned, government-sponsored corporation chartered in 1938 to purchase mortgages from lenders and resell them to investors. Known by the nickname Fannie Mae, it packages mortgages backed by the Federal Housing Administration, but also sells some nongovernment-backed mortgages.

Federal National Mortgage Association

Federal National Mortgage Association
Also known as Fannie Mae or the FNMA. A publicly-traded company chartered by the U.S. Congress to guarantee mortgages granted to low- or middle-income households. In order to do this, it buys mortgages and repackages them, selling them as mortgage-backed securities. It also maintains its own portfolio of mortgage-backed securities. With the collapse of the housing bubble, Fannie Mae was placed in federal receivership in 2008 as a result of overexposure to this market. See also: Freddie Mac, Community Reinvestment Act, Credit crunch.

Federal National Mortgage Association (FNMA)

Popularly known as Fannie Mae.A former government agency that was privatized in 1968, Fannie Mae's mandate is to increase the availability and affordability of homeownership for low-, moderate- and middle-income Americans. It does this by purchasing mortgages in the secondary market and then selling and insuring securities comprised of packages of mortgages. These are usually single-class mortgage backed securities known as Fannie Mae MBS. Contrast with multiclass mortgage backed securities described under real estate mortgage investment conduit (REMIC). The association's Web site is www.fanniemae.com; shares in the company are traded on the New York Stock Exchange as FNM.


Fannie Mae (Federal National Mortgage Association)

What Does Fannie Mae—Federal National Mortgage Association (FNMA) Mean?

A government-sponsored enterprise (GSE) that was created in 1938 to expand the flow of mortgage money by creating a secondary mortgage market. Fannie Mae is a publicly traded company that operates under a congressional charter that directs it to channel its efforts into increasing the availability of affordable home ownership for low-, moderate-, and middle-income Americans.

Investopedia explains Fannie Mae—Federal National Mortgage Association (FNMA)

Fannie Mae purchases and guarantees mortgages that meet its funding criteria. Through this process it secures mortgages to form mortgage-backed securities (MBSs). The market for Fannie Mae's MBSs is extremely large. Pension funds, insurance companies, and foreign governments are among the investors in Fannie Mae's MBSs. To promote home ownership, Fannie Mae also holds a large portfolio of its own and other institutions' MBSs, known as its retained portfolio. To fund this portfolio, Fannie Mae issues debt known in the marketplace as agency debt. Fannie Mae's “little brother” is Freddie Mac. Together, Fannie Mae and Freddie Mac purchase or guarantee 40 to 60% of all mortgages originated annually in the United States, depending on market conditions and consumer trends.

Related Terms:
Freddie Mac—Federal Home Loan Mortgage Corp.
Ginnie MaeGovernment National Mortgage Association (GNMA)
Mortgage
Subprime Loan
Subprime Meltdown



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