Federal National Mortgage Association [Fannie Mae] (FNMA: OTCBB) was founded in 1938 during the depression, is sponsored by the government to support liquidity, stability and affordability in the secondary mortgage market. The purpose of FNMA is to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing. On June 16, 2010, Fannie Mae announced their stocks would be delisted from the NYSE. FNMA's stocks would continue to trade on the OOTCBB as long as there is trader interest. The finance agency specified that the delisting had nothing to do with company performance. FNMA makes there money by them borrowing money at low rates and lending to the public at higher rates.
Originally, Fannie had an 'explicit guarantee' from the government where as if it got in trouble, the government promised to bail it out. In 1968 this changed and FNMA became a private corporation, chartered by Congress and with a direct line of credit to the US Treasury. As a Government Sponsored Enterprise it was provided the 'implied guarantee' for their borrowing. They were also limited in their business activity to strictly the mortgage market.
Fannie Mae's 2011 Mission Report illustrates the company's efforts to provide liquidity to the housing market, help struggling homeowners, and create a sustainable housing finance system for the future.
In the stock market, FNMA is trading at $.80. The market cap for the company is 922.99M. The previous close was at $0.78. Over the past 52 weeks this company has seen a low of $.20 and a high up to $1.47.
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Timothy J. Mayopoulous
Daniel H. Mudd
Susan R. McFarland
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.