The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall

By James R. Hagerty

In 1938, the administration of Franklin Delano Roosevelt created a small agency called Fannie Mae. Intended to make home loans more accessible, the agency was born of the Great Depression and a government desperate to revive housing construction. It was a minor detail of the New Deal, barely recorded by the newspapers of the day. Over the next seventy years, Fannie Mae evolved into one of the largest financial companies in the world, owned by private shareholders but with its nearly $1 trillion of debt effectively guaranteed by the government. Almost from the beginning, critics repeatedly warned that Fannie was an accident waiting to happen. Then, in 2008, the housing market collapsed. Amid a wave of foreclosures, the company's capital began to run out, and the U.S. Treasury seized control. From the New Deal to the administration of President Obama, author James R. Hagerty explains this fascinating but little-understood saga. Based on his reporting for the Wall Street Journal, personal research and interviews with executives, regulators and congressional leaders, Hagerty charts the course of Fannie Mae. With The Fateful History of Fannie Mae, he explains the politics, economics and human frailties behind seven decades of missed opportunities to prevent a financial disaster.

• Language: English
• Publisher: The History Press
• Release date: Sep 4, 2012
• ISBN: 9781614236993

Reviews for The Fateful History of Fannie Mae

[Viktor Nilsson · Rating: 4 out of 5 stars]

Not a very exciting read, but readable non the less. Fannie Mae and Freddie Mac are two of the world's largest companies. For most of their obscure lives, they have also been two of the least well-known. This book does a good job in examining the politics that put these entities into existence and allowed them to grow to such immense proportions. Hagerty takes the reader on a journey through a strange regulatory environment providing Fannie & Freddie with the benefits of both private and public ownership at the same time, a situation which in 2008 instead turned into the worst of both spheres.

This book is readable for several reasons:
-It describes an integral, yet often overlooked part of the US economy
-It is well written and should be understandable for anyone who has at least some basic understanding of finance or economics. It is an easy yet informative read on a complicated subject.
-It does a superb job in portraying highly political issues in a well-balanced way
-Finally, despite what you may think: Fannie and Freddie are still around, more important than ever. Or how about owning or guaranteeing $5 trillion worth of mortgages, half of the whole US market?