Government Sponsored Enterprise

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Government Sponsored Enterprise

A privately held or publicly traded company created by the U.S. Government for some purpose thought to benefit the American economy. For example, Freddie Mac was originally a GSE created to encourage homeownership among middle class and working class Americans. Because it is "sponsored" but not owned by the government, GSE stocks carry higher risk than, say, Treasury securities, which are backed by the full faith and credit of the United States. However, GSEs have an implicit guarantee that the government will not allow them to fail. Indeed, when Fannie Mae and Freddie Mac collapsed in 2008 they almost instantly received federal assistance.
References in periodicals archive ?
A real estate investment trust, Capsteador earns income by investing in a leveraged portfolio of residential adjustable-rate mortgage pass-through securities or ARM securities, issued and guaranteed by government-sponsored enterprises like Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae.
The Company said it expects to use the net proceeds of this offering to acquire certain of the Company's target assets, including residential mortgage-backed securities issued by US government agencies or guaranteed as to principal and interest by US government agencies or US government-sponsored enterprises. The Company may also use the net proceeds for general working capital purposes.
Senator Bob Corker (R-Tenn.), a member of the Senate Banking Committee, released the following statement on the administrations proposal to wind down government-sponsored enterprises Fannie Mae and Freddie Mac.
housing finance government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac (Fannie and Freddie) to maintain a capital reserve of $3 billion beginning in fourth-quarter 2017 (4Q17).
senators wrote a letter to Mel Watt, director of the Federal Housing Finance Agency (FHFA), on July 7, urging the top regulator of the government-sponsored enterprises (GSEs) to leave any steps related to the larger restructuring of the housing finance system to the next Congress.
19, said his agency is conducting pilot programs that would consider representations and warranties for appraisals submitted to the government-sponsored enterprises.
The bill would prohibit the Federal Housing Finance Agency (FHFA) or other regulators from setting arbitrary limitations on the volume or scope of multifamily housing mortgages backed by Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac.
"Why on earth should the 100% government-sponsored enterprises operate in the red?
Scott Garrett, Chairman of the Congressional Constitution Caucus, Chairman of the Subcommittee on Capital Markets and Government-Sponsored Enterprises, House Financial Services Committee; and Louise Bennetts, Associate Director of Financial Regulation Studies, Cato Institute; moderated by Laura Odato, Director of Government Affairs, Cato Institute.The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was intended to "promote the financial stability of the United States by improving accountability and transparency in the financial system, to end 'too big to fail,' to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes."
* Valentin Bolotnyy, Federal Reserve Board of Governors, "The Government-Sponsored Enterprises and the Mortgage Crisis: The Role of the Affordable Housing Goals"
But relatively few homeowners will qualify and benefit from the program, and it is American taxpayers who will be floating them the money, through those infamous government-sponsored enterprises, Fannie Mae and Freddie Mac.
Federal Housing Finance Agency filed lawsuits Friday against 17 financial institutions for damages caused by their illegal sales of mortgage-backed securities to government-sponsored enterprises Fannie Mae and Freddie Mac, the analysts said.

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