Quote:
Originally Posted by lendaddy
I'll do some research but let's remember you didn't think they had any at all. The article claimed 200 billion. Is that immaterial?
"The subprime mortgage bonds that Fannie Mae and Freddie Mac hold may have lost $4.7 billion in value, two Citigroup analysts, Brett Rose and Scott Peng, estimated in a report last week. The figures were based on reported holdings of $58 billion for Fannie Mae and $124 billion for Freddie Mac in December."
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$182 billion of a $5.3 trillion portfolio is immaterial, yes. Keep in mind, these entities trade hundreds of billions in securites every day. The scope of their size is often difficult to get your hands around.
Also, nowhere did I say they did not hold any subprime instruments. I said they had nothing to do with the crisis. A 'conforming mortgage' is one that meets the specifications promulgated by FHLMC/FNMA. Subprimes don't meet that standard (logically, there's a higher rate for the risk, if you don't qualify for FNMA/FHLMC backing - that goes right to their charter). If they hold subprime, then they likely bought them on the secondary market - but they are not, to my knowledge, a primary underwriter of those loans. Happy to eat my words if I'm wrong, though.