Congress in 1938 during the Roosevelt administration as part of the New Deal, as an effort to combat the Great Depression.
In response, Fannie Mae was created by the U.S. This rendered over a quarter of the total population of homeowners in America to have their homes thereinafter foreclosed, losing their houses to the banks. During the Great Depression, individuals who were unable to work or pay for their mortgages fell victim to a sub-par housing market, which led to a whopping 25% of the total mortgage debt in the country falling in default by 1933. What this meant was that the mortgage did not fully amortize over the term of the note and as a result, left a balance due at maturity.
In the early 1900s, the majority of mortgage loans in the United States were short-term balloon payment loans. The Fannie Mae is tied to the Federal Home Loan Mortgage Corporation (Freddie Mac.) The entity was founded in 1938 during the Great Depression as part of the New Deal. In consequence, this will make mortgage lenders rely less on local savings and loan associations and grow their overall business in the process. The main driving force of the corporation is to encourage lending and bolster the local lending industry by assisting lenders to reinvest the money they would otherwise have to put into securities back into lending. Starting as a private business in 1968, it later became publicly listed in 1971 and is classified as a United States government-sponsored enterprise. The Federal National Mortgage Association or Fannie Mae is a federally supported corporation with a long history.
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