Fannie and Freddie

The only 3 companies I can think of that are named after people and aren't a really shorted version of a person's name are Fannie Mae and Freddie Mac. Now I know I said 3. Well actually Fannie Mae is the same name for two totally different companies. One is a confectionary and the other, a mortgage lender. Fannie Mae the mortgage lender (Federal National Mortgage Association), has had a lot of press lately due to the sub-prime mortgage fiasco. They've been helping people buy homes long before deregulation of the mortgage lending laws. Fannie Mae the confectionary, has also been in business a long while. Originally it was privately owned and their chocolates were preservative free, fresh, not too sweet and delicious. They used to have stores where you could taste and buy their products directly. It used to be my favorite chocolates. Since 1-800-FLOWERS bought out that company, the quality has diminished and now I think they've begun adding preservatives which has deteriorated the taste considerably. Plus they've begun adding way too much sugar, so it's sickenly sweet, which I don't like.  I no longer consume their products.

Freddie Mac (Federal Home Mortgage Corporation), is also a mortgage lending company. What's the difference, well here's an excerpt from The George Mason University's History News Network:
"Fannie Mae was created in 1938 as part of Franklin Delano Roosevelt's New Deal. The collapse of the national housing market in the wake of the Great Depression discouraged private lenders from investing in home loans. Fannie Mae was established in order to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing.

Initially, Fannie Mae operated like a national savings and loan, allowing local banks to charge low interest rates on mortgages for the benefit of the home buyer. This lead to the development of what is now known as the secondary mortgage market. Within the secondary mortgage market, companies such as Fannie Mae are able to borrow money from foreign investors at low interest rates because of the financial support that they receive from the U.S. Government. It is this ability to borrow at low rates that allows Fannie Mae to provide fixed interest rate mortgages with low down payments to home buyers. Fannie Mae makes a profit from the difference between the interest rates homeowners pay and foreign lenders charge.

For the first thirty years following its inception, Fannie Mae held a veritable monopoly over the secondary mortgage market. In 1968, due to fiscal pressures created by the Vietnam War, Lyndon B. Johnson privatized Fannie Mae in order to remove it from the national budget. At this point, Fannie Mae began operating as a government sponsored enterprise (GSE), generating profits for stock holders while enjoying the benefits of exemption from taxation and oversight as well as implied government backing. In order to prevent any further monopolization of the market, a second GSE known as Freddie Mac was created in 1970. Currently, Fannie Mae and Freddie Mac control about 90 percent of the nation's secondary mortgage market."


Now I am familiar with other companies that are the shortened version of the creator, like Elizabeth clothing. This is a division of Liz Clairborne. I really like those clothes, they're well made and not to overly expensive. They used to have their own speciality stores and still do here and there, yet not like before. Instead now you can buy their products at other department stores and not all carry it either. I wish it were still more widely available.


Note: If you're interested in reading the full article about Fannie & Freddie's History = http://hnn.us/articles/1849.html

4vrUnique 4vrUnique
46-50
Jul 22, 2010