The Future of the Government-Sponsored Enterprises: The Role for Government in the U.S. Mortgage Market

This chapter focuses on the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. It first discusses the background and origin of the GSEs, the evolution of their structure as a public/private partnership, and the federal role in supplying housing credit. It then provides a brief summary of home ownership and government policy. Next, it describes the broader objectives and goals of the GSE institutions and analyzes the most recent failures of the credit market and the secondary housing market. It explores the likely consequences of plans to restructure GSEs and alternative mechanisms for government support of the US mortgage market. It also provides a brief summary of the GSEs under their government conservatorship since September 2008.