Industry News

No need to worry about Fannie Mae

Problems shouldn't overshadow vital mission

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Fannie Mae, the nation's top source of financing for home mortgages, will likely survive the accounting problems, investigations, and regulatory actions that it now faces – and it must – say some industry sources. The government-sponsored entity is too important to the housing market to be dismantled or rebuilt, they say. In the last week, Fannie Mae's stock has dropped 18 percent, equivalent to $16 billion in market capitalization. The U.S. Congress has launched a committee hearing on the firm's accounting woes, and the Office of Federal Housing Enterprise Oversight issued a scathing report on Fannie Mae. The stakes are high: Fannie Mae and Freddie Mac, another secondary mortgage market titan, together own or guarantee about half of the U.S. mortgage market. Fannie Mae alone has provided an estimated $6.3 trillion in mortgage financing for 63 million families since 1968. "We're certainly confident that Fannie Mae is going to be with us for many years to come," said Steve...