In recent years, some industry and government critics, including Alan Greenspan, the chairman of the Federal Reserve, have sought to have Fannie Mae's privileges removed. They say the company could pose a significant risk to taxpayers if it became troubled. And the White House, concerned about any political fallout if Fannie were to stumble, has declined to make 5 appointments to the 18-member board.
Until recently, Fannie successfully beat back the efforts to dilute its power by promoting its housing function. But it is now expected to face a reinvigorated effort in Congress to limit its growth.
Fannie Mae does not itself issue mortgage loans. But it serves as a bridge between lenders on Main Street and enormous pools of capital on Wall Street. By buying mortgages up to a certain dollar level - currently $333,700 - from banks and savings institutions, and either holding them as an investment or selling them in the secondary markets as mortgage-backed securities, it has made housing financing widely available.
In the process, it has built a steadily profitable business for shareholders and enriched its top executives. Together with a smaller brother company, Freddie Mac, it holds or guarantees more than $7 trillion in mortgages.
From a December 21, 2004 New York Times article.
This was foreseen, and discussed, and most importantly, beaten back by the democrats...
Now that we have a Majority of democrats, what else are they going to set in motion?
