The Fateful History of Fannie Mae Quotes

“Hunter kept salaries fairly low, though above civil-service levels. Rather than using giant banks and Wall Street firms as the benchmark, as was the case later, Hunter took compensation cues from the World Bank and the Federal Reserve Bank of New York, among others.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“Roger Birk, then president of Fannie, seemed totally relaxed about preserving the company’s status: “Obviously, Fannie Mae’s activities in providing a liquid secondary market have a benefit to society in terms of lower mortgage rates,” he said. “Our activity doesn’t cost the government anything. In fact, we have a huge tax bill. And I can tell you that there is zero appetite in Congress for a change, for privatization—not 9%, not 25%, but zero.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“In Pittsburgh, Fannie scored political points in the late 1980s by helping finance the conversion of a downtown YMCA building into a 270-room shelter for homeless people.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“For a spell in the early 1980s, losses exceeded $1 million a day. Fannie’s borrowing costs had soared far above the income it received on its holdings of mortgage loans, most of which had been made when interest rates were low. In 1981, the average yield on mortgages owned by Fannie was 9.45 percent, below the 10.81 percent average interest cost on its debt.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“Congress began drafting legislation that became the Emergency Home Finance Act of 1970. This act created the Federal Home Loan Mortgage Corp., or Freddie Mac, as a provider of funding that, initially, would pay particular attention to the S&Ls’ needs.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“The business model was simple. Fannie raised money by selling bonds. The company then used the proceeds to buy mortgage loans shortly after they were made by mortgage bankers. It received the payments on those loans. Profits came from the difference between Fannie’s low borrowing costs and the higher ones paid by homeowners.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“Congress took up the administration’s plan as a small part of the Housing and Urban Development Act of 1968. Part of the old Fannie remained within the government as the Government National Mortgage Association, or GNMA, inevitably dubbed Ginnie Mae. Ginnie’s role was to guarantee payments on a new type of security backed by pools of FHA and VA mortgages.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“After the wartime lull, Fannie’s loan investments rebounded as surging demand for housing spurred construction, especially in the suburbs. For home builders, Fannie was becoming a financial lifeline. Builders often relied on an advance commitment from Fannie to purchase a mortgage at a specified interest rate once construction of a home was completed and FHA insurance secured. By 1953, Fannie’s portfolio totaled $2.5 billion, up from $4.4 million at the low point in 1947.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“In explaining the housing bust, Democrats tend to blame loose regulation and Wall Street greed. Republicans point to federal programs—especially the government-backed mortgage companies Fannie Mae and Freddie Mac, responsible for funneling money into home loans and spreading homeownership.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

“If these are public entities, then they’ve got to get out of the profit-making business,” President Obama declared, “and if they’re private entities, then we don’t bail them out.” Yet they were both public and private. And we are bailing them out.”
― James R. Hagerty, The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall