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Aren't Freddy and Fanny state-owned and de facto holding most securitized mortgages in the US?
by ddebernardy 13y ago
Aren't Freddy and Fanny state-owned and de facto holding most securitized mortgages in the US?
- leg100 13y agoAt the time of the crisis they were listed on the stock market and then put into 'conservatorship'. They bought mortgages and resold them on as mortgaged-backed securities, presumably to a mix of US and foreign entities.
- georgeecollins 13y agoThey hold most 30 year mortgages. Subprime mortgagages, ARMs etc were securitized. If the problem was Freddie or Fannie not getting paid it would be a different problem. Lehman Bros went bankrupt, as would many other financial institutiosn without a bailout because they held a lot of garbage paper (including subprime mortgages) and were very illiquid. Many European and Asian banks had huge US mortgage exposure. The problem was extreme mispricing of risk and illiquidity.