Fannie Mae and Freddie Mac, as creators of and main players…
Fannie Mae and Freddie Mac, as creators of and main players in the secondary mortgage market, buy mortgages from lenders and package them into mortgage-backed securities, or MBS. During the housing bubble, Wall Street investment firms bought subprime loans and packaged them into private-label MBS. What was the KEY difference between Fannie and Freddie’s so-called agency MBS and Wall Street’s private-label MBS?