US government-sponsored mortgage securities ‘amplify crises’

Paper says dynamic between lenders and Fannie Mae/Freddie Mac not conducive to financial stability

Image of jenga game

Mortgage securitisation sponsored by the US government amplifies financial crises, according to new research from the Federal Reserve.

The research claims that securitisation of home loans through the Federal National Mortgage Association (commonly known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (commonly known as Freddie Mac) is likely to exacerbate the severity and frequency of crises. 

The paper – written by Wayne Passmore and Roger Sparks, and published on January 19 – says

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account