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.

government-sponsored enterprise (GSE)

One of a group of financial services organizations created by the government. Some are owned by the federal government, some are owned by private individuals,and some are owned by corporations that use their services.All of them enjoy exceptionally low loan rates and exceptionally high sales prices for their bonds and other debt instruments because of the implicit backing of the U.S.government.They include

• Federal Home Loan Banks. Owned by over 8,000 community financial institutions that use the services of the FHLBs.
• Federal Home Loan Mortgage Corporation (Freddie Mac). A stockholder-owned, publicly traded corporation listed on the New York Stock Exchange as FRE.
• Federal National Mortgage Association (Fannie Mae). A stockholder-owned, publicly traded corporation listed on the New York Stock Exchange as FNM.
• Government National Mortgage Association (Ginnie Mae). A wholly owned (by the government) corporation within the Department of Housing and Urban Development.
• Farm Credit Bank. Federally chartered and borrower-owned financial institutions.
• Federal Agricultural Mortgage Association (Farmer Mac). A stockholder-owned, publicly traded corporation listed on the New York Stock Exchange as AGM.
• Student Loan Marketing Corporation (Sallie Mae). A stockholder-owned, publicly traded corporation listed on the New York Stock Exchange as SLM.

References in periodicals archive ?
FHA-eligible mortgages that are not insured and that are sold either to a government-sponsored enterprise or to a nonaffiliated depository institution are more likely to be mortgages of higher-income or white or Asian borrowers.
A real estate investment trust, Ellington Residential Mortgage acquires, invests in and manages residential mortgage and real estate-related assets, mainly on residential mortgage-backed securities for which the principal and interest payments are guaranteed by a US government agency or a US government-sponsored enterprise.
Ellington Residential Mortgage REIT is a mortgage real estate investment trust or "REIT" that specializes in acquiring, investing in and managing residential mortgage- and real estate-related assets, with a primary focus on residential mortgage-backed securities for which the principal and interest payments are guaranteed by a US government agency or a US government-sponsored enterprise. Ellington Residential Mortgage REIT is externally managed and advised by Ellington Residential Mortgage Management LLC, an affiliate of Ellington Management Group, L.L.C.
A real estate investment trust, AGNC invests primarily in residential mortgage-backed securities for which the principal and interest payments are guaranteed by a US Government-sponsored enterprise or a US Government agency.
Ellington Financial acquires and manages mortgage-related assets, including residential mortgage-backed securities backed by prime jumbo, Alt-A, manufactured housing and subprime residential mortgage loans, residential mortgage-backed securities for which the principal and interest payments are guaranteed by a US government agency or a US government-sponsored enterprise.
"HUD's primary concern is whether the GSEs' investment activities are consistent with their charter authorities and public purposes, and whether each is using the profits it derives as a government-sponsored enterprise for the purposes intended."
Throughout his tenure with Sallie Mae, he has been instrumental in executing strategic initiatives, such as the privatization of the company from a government-sponsored enterprise, the navigation of the global financial crisis and the business restructuring following the end of the private sector federal student loan program.
The first commercial mortgage bond deal in nearly a year, the sale would be the first time that a commercial mortgage bond is sold with the backing of a government-sponsored enterprise. The deal, led by Deutsche Bank (NYSE: DB) (DBK.DE), will help Freddie with new ways to raise liquidity and support the troubled multifamily market.
THE OFFICE OF FEDERAL HOUSING ENTERprise Oversight (OFHEO) announced an agreement with Freddie Mac in which the government-sponsored enterprise (GSE) will actively cooperate with the agency in its investigation of Freddie's former top officers.
It invests in residential mortgage pass-through securities and collateralised mortgage obligations for which the principal and interest payments are guaranteed by government-sponsored enterprise or by the US government agency.
Fannie Mae is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.
Reducing the common stock dividend will contribute toward building Fannie Mae's capital to a 30 percent surplus over its minimum capital requirement, the government-sponsored enterprise (GSE) stated.

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