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The stock market crash of 1929 served a devastating blow to the national economy Many people suddenly found themselves out of work as the nation spiraled into The Great Depression of the 1930s Many Americans were forced to default on their mortgage loans The Federal Housing Administration FHA a wholly owned government corporation was established under the National Housing Act of 1934 Its primary goals were to provide an adequate home financing system through insurance of mortgages and to stabilize the mortgage market In 1938 Congress created Fannie Mae to refinance FHA insured mortgages httpwwwfhatodaycomfhahtm Fannie Mae has developed into a dominating force in the home finance market since its introduction in 1938 undergoing some major transformations along the way The organization was privatized in 1968 while at the same time retaining a number of connections to the government converting it into somewhat of a governmental - private organization hybrid Examples of what make Fannie Mae unique to most other private organizations include being exempt from state and local income taxes Furthermore the organization is not required to register their securities with the Securities and Exchange Commission The secretary of the Treasury is also authorized to invest up to 225 billion in their securities and to approve their issuance of debt Wallison Nationalizing Mortgage Risk p6 Since the companys privatization in 1968 Fannie Mae has provided 40 trillion in financing to millions of American families Homeownership is considered to be one of the major components of The American Dream Not coincidentally Fannie Maes slogan is Our business is the American Dream The company claims responsibility for increasing the countrys homeowner rates by reducing the cost of buying a home The company has generated a great deal of capital from investors as well as government subsidies to become Americas second largest corporation asset-wise Keeping low-cost funds flowing to mortgage lenders to lend to home buyers in all communities at all times under all economic conditions Fannie
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