History of Fannie Mae in Timeline

Fannie Mae (Federal National Mortgage Association) is a U.S. government-sponsored enterprise created in 1938 during the Great Depression. It operates in the secondary mortgage market by purchasing and securitizing mortgages into mortgage-backed securities (MBS). This process enables lenders to reinvest in more mortgage lending, increasing the availability of home loans and diversifying the mortgage market beyond local savings and loan associations. Since 1968, Fannie Mae has been a publicly traded company, working alongside Freddie Mac to facilitate homeownership in the United States.

1933: Mortgage Debt Default

By 1933, an estimated 20 to 25% of the nation's outstanding mortgage debt was in default due to the Great Depression, leading to foreclosures where nearly 25% of America's homeowners lost their homes to banks.

1938: Fannie Mae Established

In 1938, Fannie Mae was established by the U.S. Congress as part of Franklin Delano Roosevelt's New Deal to provide local banks with federal money to finance home loans.

1950: Fannie Mae Acquired

In 1950, Fannie Mae was acquired by the Housing and Home Finance Agency from the Federal Loan Agency as a constituent unit.

1954: Federal National Mortgage Association Charter Act

In 1954, an amendment known as the Federal National Mortgage Association Charter Act made Fannie Mae into a "mixed-ownership corporation."

1968: Ginnie Mae's First Mortgage Pass-Through

In 1968, Ginnie Mae guaranteed the first mortgage pass-through security of an approved lender.

1968: Ginnie Mae split from Fannie

In 1968, Ginnie Mae was split off from Fannie Mae. Ginnie retained the explicit guarantee from the government, while Fannie became a private corporation with a direct line of credit to the US Treasury, and therefore had an implied guarantee.

1968: Fannie Mae Split

In 1968, arising from the Housing and Urban Development Act of 1968, Fannie Mae's predecessor (also called Fannie Mae) was split into the current Fannie Mae and the Government National Mortgage Association (Ginnie Mae).

1968: Fannie Mae Becomes Publicly Traded

In 1968, the Federal National Mortgage Association (Fannie Mae) became a publicly traded company.

1970: Authorization and Public Offering

In 1970, the federal government authorized Fannie Mae to purchase conventional loans and created the Federal Home Loan Mortgage Corporation (Freddie Mac) to compete with Fannie Mae. That same year FNMA went public on New York and Pacific Exchanges.

1971: Freddie Mac's First Mortgage Pass-Through

In 1971 Freddie Mac issued its first mortgage pass-through, called a participation certificate, composed primarily of private mortgage loans.

1977: Community Reinvestment Act

The Community Reinvestment Act (CRA) was introduced in 1977.

1981: First Mortgage Pass-Through

In 1981, Fannie Mae issued its first mortgage pass-through, which was called a mortgage-backed security.

1992: Housing and Community Development Act of 1992

In 1992, President George H. W. Bush signed the Housing and Community Development Act of 1992, amending Fannie Mae and Freddie Mac's charter to require them to meet "affordable housing goals".

1996: Congressional Budget Office Report

In 1996, the Congressional Budget Office wrote that government-sponsored enterprises are costly to the government and taxpayers and the benefit is currently worth $6.5 billion annually.

1998: Accusation of manipulating Fannie Mae earnings

From 1998 to 2004, Franklin Raines, J. Timothy Howard, and Leanne G. Spencer were accused of manipulating Fannie Mae earnings to maximize their bonuses.

1999: Pressure to Expand Mortgage Loans

In 1999, Fannie Mae faced pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing their loan portfolios in distressed inner city areas designated in the Community Reinvestment Act (CRA).

1999: Increased Risk in Subprime Market

In 1999, The New York Times reported that Fannie Mae's move towards the subprime market was taking on significantly more risk, which could lead to a government rescue in an economic downturn.

June 15, 2000: House Banking Subcommittee Hearings on Fannie Mae

On June 15, 2000, the House Banking Subcommittee On Capital Markets, Securities And Government-Sponsored Enterprises held hearings on Fannie Mae, indicating concerns with business and accounting practices predating the scandal.

2000: Anti-Predatory Lending Rules

In 2000, due to a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals.

2001: Earnings Rise Due to Refinancing Boom

During 2001, financial institutions' earnings rose due to an unprecedented refinancing boom caused by historically low interest rates.

September 2003: Duration gap between plus to minus one month

From September 2003 to March, the duration gap has run between plus to minus one month.

2003: Earnings Rise Due to Refinancing Boom

During 2003, financial institutions' earnings rose due to an unprecedented refinancing boom caused by historically low interest rates.

2003: Risk Assessment

In 2003, Alex Berenson of The New York Times reported that Fannie Mae's risk was much larger than was commonly believed.

2003: Subprime Mortgage Crisis Begins

In 2003, the subprime mortgage crisis began. The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization (PLS) conduits.

September 20, 2004: Report alleges widespread accounting errors

On September 20, 2004, the Office of Federal Housing Enterprise Oversight released a report alleging widespread accounting errors at Fannie Mae.

2004: Accusation of manipulating Fannie Mae earnings

From 1998 to 2004, Franklin Raines, J. Timothy Howard, and Leanne G. Spencer were accused of manipulating Fannie Mae earnings to maximize their bonuses.

2004: Introduction of Custom DU

In 2004 Fannie Mae followed up the Desktop Underwriter (DU) program with Custom DU, which allows lenders to set custom underwriting rules to handle nonconforming loans as well.

2004: Reintroduction of High-Risk Loans

In 2004, the anti-predatory lending rules were dropped, and high-risk loans were again counted toward affordable housing goals.

2004: Subprime Mortgage Crisis Begins

In 2004, the subprime mortgage crisis began. The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization (PLS) conduits.

2004: Alan Greenspan's Testimony

In testimony before the House and Senate Banking Committee in 2004, Alan Greenspan expressed the belief that Fannie Mae's (weak) financial position was the result of markets believing that the U.S. Government would never allow Fannie Mae (or Freddie Mac) to fail.

January 26, 2005: Federal Housing Enterprise Regulatory Reform Act of 2005 Introduced

On January 26, 2005, the Federal Housing Enterprise Regulatory Reform Act of 2005 (S.190) was first introduced by U.S. Senator Chuck Hagel to reform the existing GSE regulatory structure.

July 2005: Bill Reported Favorably

In July 2005, the Federal Housing Enterprise Regulatory Reform Act of 2005 (S.190) was reported favorably by the Senate's Committee on Banking, Housing, and Urban Affairs.

July 2005: Committee Report Produced

In July 2005, the House Financial Services Committee had crafted changes and produced a committee report for the Federal Housing Finance Reform Act of 2005 (H.R. 1461).

2005: Concerns About Layered-Risk Lending

In early 2005, Fannie Mae began sounding concerns about layered-risk lending. Tom Lund, the head of their single-family mortgage business, publicly stated concerns about homebuyers being put into programs that have more risk.

December 18, 2006: U.S. regulators filed civil charges against Fannie Mae executives

On December 18, 2006, U.S. regulators filed 101 civil charges against Fannie Mae executives Franklin Raines, J. Timothy Howard, and Leanne G. Spencer, accusing them of manipulating earnings to maximize bonuses.

2006: Purchase of Subprime and Alt-A loans

In 2006 Fannie Mae did purchase subprime and Alt-A loans as investments.

2006: Fannie Mae spending on internal audit

In 2006, Fannie Mae was expected to spend over $1 billion to complete its internal audit and move closer to compliance.

2006: McCain Cosponsors Bill

In 2006, Sen. John McCain's decision to become a cosponsor of S.190 was the last action taken regarding Sen. Hagel's bill.

2006: Oversupply of underpriced housing finance

In 2006, the growth of private-label securitization and lack of regulation in the market resulted in the oversupply of underpriced housing finance. This led to an increasing number of borrowers with poor credit being unable to pay their mortgages, particularly with adjustable rate mortgage loans (ARM), causing a precipitous increase in home foreclosures.

2007: Affordable Housing Goals Increase

By 2007, the annual goal for low-income and moderate-income mortgage purchases for each GSE had increased to 55% of the total number of dwelling units financed by mortgage purchases.

2007: Purchase of Subprime and Alt-A loans

In 2007 Fannie Mae did purchase subprime and Alt-A loans as investments.

2007: Daniel Mudd's Testimony

In 2007, Daniel Mudd, then president and CEO of Fannie Mae, testified that the agency's underwriting requirements drove business into the arms of the private mortgage industry who marketed aggressive products without regard to future consequences.

June 2008: CEOs received loans below market rate

In June 2008, The Wall Street Journal reported that two former CEOs of Fannie Mae, James A. Johnson and Franklin Raines, had received loans below market rate from Countrywide Financial.

July 11, 2008: Government considers Fannie Mae and Freddie Mac takeover

On July 11, 2008, The New York Times reported that U.S. government officials were considering a plan for the U.S. government to take over Fannie Mae and/or Freddie Mac should their financial situations worsen due to the U.S. housing crisis. The government officials also stated that the government had also considered calling for explicit government guarantee through legislation of $5 trillion on debt owned or guaranteed by the two companies.

July 2008: Government attempts to ease market fears

In July 2008, the US government tried to ease market fears by reiterating that "Fannie Mae and Freddie Mac play a central role in the US housing finance system". The US Treasury Department and the Federal Reserve took steps to bolster confidence in the corporations, including granting both corporations access to Federal Reserve low-interest loans and removing the prohibition on the Treasury Department to purchase the GSEs' stock.

July 30, 2008: Law enabling expanded regulatory authority increases national debt ceiling

On July 30, 2008, a law enabling expanded regulatory authority over Fannie Mae and Freddie Mac increased the national debt ceiling by US$800 billion to a total of US$10.7 trillion in anticipation of the potential need for the Treasury to have the flexibility to support the federal home loan banks.

August 2008: Fannie Mae's Mortgage Portfolio

By August 2008, Fannie Mae's mortgage portfolio was in excess of $700 billion.

August 2008: Fannie Mae and Freddie Mac shares tumble

By August 2008, shares of both Fannie Mae and Freddie Mac had tumbled more than 90% from their one-year prior levels.

September 7, 2008: Fannie Mae and Freddie Mac Placed into Conservatorship

On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship. The firms' chief executive officers and boards of directors were dismissed, and the Treasury was given new senior preferred stock and common stock warrants amounting to 79.9% of each GSE. FHFA stated that there are no plans to liquidate the company.

2008: Government Takeover Contribution

During the boom, Fannie and Freddie invested billions of dollars in mortgage-backed securities issued by such companies as Nomura. Those investments bolstered profits but, in the bust, contributed to steep losses that ultimately resulted in the companies' 2008 government takeover.

2008: Fannie and Freddie Underpin U.S. Mortgage Market

In 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) had owned or guaranteed about half of the U.S.'s $12 trillion mortgage market.

2008: Higher pricing for non-conforming loans

In 2008, since the demand for bonds not guaranteed by GSEs was almost non-existent, non-conforming loans were priced nearly 1% to 1.5% higher than conforming loans.

2008: TBA-eligible mortgage-backed securities include jumbo loans

In early 2008, the decision was made to allow TBA (To-be-announced)-eligible mortgage-backed securities to include up to 10% "jumbo" loans.

2008: Fannie and Freddie rescue

Since their 2008 rescue, Fannie and Freddie have been controlled by the FHFA.

2009: Employee voiced suspicions about kickbacks

In 2009, an employee of Fannie Mae started voicing her suspicions about kickbacks, which she claims led to her wrongful termination.

June 16, 2010: Fannie Mae and Freddie Mac Stocks Delisted from NYSE

On June 16, 2010, Fannie Mae and Freddie Mac announced their stocks would be delisted from the NYSE, after Fannie's stock traded below $1 a share for over 30 days. Since then the stocks have continued to trade on the Over-the-Counter Bulletin Board.

February 2011: CFO received notice from the SEC

In February 2011, Anthony "Buddy" Piszel, then CFO of CoreLogic and former Freddie Mac CFO, received notice from the SEC that the agency was considering taking action against him.

December 2011: Executives charged with securities fraud

In December 2011, six Fannie Mae and Freddie Mac executives, including Daniel Mudd, were charged by the U.S. Securities and Exchange Commission with securities fraud related to misleading statements about subprime loan exposure.

2011: FHFA targets financial institutions

In 2011 the FHFA targeted 18 financial institutions, including Bank of America Corp. and Goldman Sachs Group Inc., alleging that the companies lied about the quality of the loans underlying the securities.

2011: FHFA lawsuits against financial institutions

In 2011, the FHFA sued 18 financial institutions, including JPMorgan Chase, accusing them of selling risky securities to Fannie and Freddie. Fannie and Freddie sustained massive losses and required a bailout.

2012: Summary judgment clears trio

In 2012, a summary judgment was issued clearing the trio, indicating the government had insufficient evidence that would enable any jury to find the defendants guilty.

May 8, 2013: Budget and Accounting Transparency Act of 2014 Introduced

On May 8, 2013, Representative Scott Garrett introduced the Budget and Accounting Transparency Act of 2014 (H.R. 1872) into the United States House of Representatives, which would modify the budgetary treatment of federal credit programs, including Fannie Mae and Freddie Mac.

May 2013: Fannie Mae to pay dividend to U.S. Treasury

In May 2013, Fannie Mae announced that it is going to pay a dividend of $59.4 billion to the United States Treasury.

May 29, 2013: Fannie Mae foreclosure specialist charged

On May 29, 2013, the Los Angeles Times reported that a former foreclosure specialist at Fannie Mae has been charged but pleaded "not guilty" to accepting a kickback from an Arizona real estate broker in a Santa Ana Federal court.

2014: Gross flows in 2014

In 2014, there were gross flows.

2014: Budget and Accounting Transparency Act of 2014

December 31, 2014: Fannie Mae Dividends to Treasury

Fannie Mae's 2014 financial results enabled it to pay $20.6 billion in dividends to Treasury for the year, resulting in a cumulative total of $134.5 billion in dividends through December 31, 2014 – approximately $18 billion more than Fannie Mae received in support.

March 31, 2015: Fannie Mae Expected Payments to Treasury

As of March 31, 2015, Fannie Mae expects to have paid a total of $136.4 billion in payments to the Treasury.

May 11, 2015: Nomura Holdings Inc. Found Untruthful

On May 11, 2015, A U.S. District Court judge said Nomura Holdings Inc. was not truthful in describing mortgage-backed securities sold to Fannie Mae and Freddie Mac, giving a victory to the companies' conservator, the Federal Housing Finance Agency (FHFA).

2023: Mortgage market value equivalent in 2023

As recently as 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) had owned or guaranteed about half of the U.S.'s $12 trillion mortgage market (equivalent to $16,680,000,000,000 in 2023).

2023: Equivalent spending in 2023

In 2006, Fannie Mae was expected to spend over $1 billion which is equivalent to $1,454,000,000 in 2023.

2023: Dividend payment equivalent in 2023

In May 2013, Fannie Mae announced that it is going to pay a dividend of $59.4 billion (equivalent to $76,620,000,000 in 2023) to the United States Treasury.

2024: Fannie Mae's Ranking

In 2024, Fannie Mae, with over $4.3 trillion in assets, is the largest company in the United States and the fifth largest company in the world by assets. It was ranked number 27 on the Fortune 500 and number 58 on the Fortune Global 500 by total revenue. In terms of profit, Fannie Mae is the 15th most profitable company in the United States and the 33rd most profitable in the world.