CHAPTER 9Private-Label Mortgage-Backed Securities

THERE WAS NO AMBIGUITY IN THE ATTITUDE OF TREASURY, THE Fed, and commercial banks and thrifts toward Fannie Mae’s portfolio business. They opposed it—whether for ideological, competitive, or other reasons—and consistently sought to convince Congress to remove some or all of our charter benefits in order to raise our debt costs if not eliminate the portfolio altogether. These same groups took a different approach to our mortgage-backed securities guaranty business: rather than try to constrain it, they focused on developing a private-market alternative that could compete with it.

MBSs, CMOs, and REMICs

Following its creation in 1968, Ginnie Mae was the first entity to issue mortgage-backed securities. ...

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