Timothy Howard was an executive at Fannie Mae through the 90s and into the 2000s, leaving just a few years before the big crash of 2008 when the government bailed out the Government Sponsored Enterprise (GSE). This book is an incredibly detailed inside-view of the secondary mortgage market and the rise and fall of the GSEs in the modern economy.
Most people know Fannie Mae from the 2008 mortgage crisis where the government stepped in and bailed them out, but it’s been around in various forms since the New Deal. Fannie Mae does not issue loans to consumers directly; rather, they are (still) a major player in the “œsecondary mortgage market”””that is, they purchase existing loans from the banks that originally lend the money out. This is fantastic for the banks: when they sell their loan on the secondary market, they immediately earn their profit (interest), their risk disappears (since they are no longer servicing the loan and thus aren’t on the hook in case of a default), and they have their capital back to loan out again.






