Government-backed lenders Fannie Mae and Freddie Mac guarantee nearly half of all current, outstanding mortgage debt in the nation.
During the housing crisis a decade ago, the federal government put both entities into conservatorship to add stability to the housing financing market, as the failure of the two institutions was thought at the time as powerful enough to sink the nation into economic depression. Writing for The Washington Post, Moody's Analytics chief economist Mark Zandi and Urban Institute fellow Jim Parrott separate fact from fiction regarding the purpose of the institutions as government-sponsored entities, how they have helped and hurt housing, and how they could be restructured effectively.
It has been a decade since the global financial crisis hit with full force, leaving in its wake breathtaking economic and social devastation. Much of the financial system has been restructured since to reduce the possibility that we ever again suffer such events. But one major piece of unfinished business remains: the restructuring of Fannie Mae and Freddie Mac.