The GSEs, Fannie Mae and Freddie Mac, are quasi-public entities that purchase home mortgages from banks and either hold them or package them and re-sell them as mortgage-backed securities. Their profits accrue to their shareholders and well-compensated executives, while they enjoy low borrowing costs due to the implied backing of the US Treasury. They have come under considerable scrutiny lately due to a series of financial mis-steps and earnings scandals.
You can follow it in great detail by reading the bi-weekly GSE Report, a digest service that summarizes the top GSE news stories from a range of business publications. Their mid-September issue is out now.
