Fannie Mae copied the Freddie Mac idea and began packaging mortgages in 1982. Let’s say you had a mortgage on your house that came from Bank X. Bank X would sell your mortgage to Fannie Mae. Fannie Mae would lump it together with other mortgages to create a “mortgage-backed security.” It could then sell the mortgage-backed security to anybody, even back to the banks that had originated the mortgages in the package.
2008 financial crisis
