A new report details how private companies were able to overtake Fannie Mae and Freddie Mac in the secondary mortgage market in 2005, issuing more mortgage-backed securities than the government-sponsored enterprises for the first time ever. While home sales, house prices and home-ownership rates were all setting new records in 2005, GSEs Fannie Mae and Freddie Mac saw their share of the secondary mortgage market continue to decline. The reasons for the decline include the continuing popularity of nontraditional mortgages, such as interest-only and payment-option adjustable-rate mortgages, which don't always conform to Fannie and Freddie's underwriting standards, and continuing fallout over management and accounting scandals at the government-sponsored mortgage repurchasers. That's accor...
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