Summary
Fannie Mae's newly discovered accounting artifices could give lagging reform efforts in Congress some impetus. Mortgage giants Fannie Mae and Freddie Mac are financial behemoths and political sacred cows - escaping much needed oversight because of their role in making housing more affordable. Attempts in Congress to regulate the companies more vigorously have been caught in legislative logjams, with Democrats acting as the more unmovable force.
Fannie and Freddie, both government- sponsored entities, own or guarantee nearly half of the country's $7 trillion market for U.S. mortgages. The companies help lower mortgage rates by making the market more uniform and liquid. That role has given them a political tincture - they enjoy special regulatory exemptions and some of their board members are appointed by the president. Both companies have an implicit, but not explicit, guarantee on their liabilities from the federal government.See the full content of this document
Extract
Fannie's Funny Accounting
Accounting problems at both firms have raised alarm in the financial community, and Federal Reserv...
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