"You can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years.”
We all remember Freddie Mac and Fannie Mae, the twin quasi-public organizations who backstopped the home loan industry for the whole country. Freddie and Fannie were thought by some to be on the verge of extinction during the home loan crisis, but they revived when Washington stepped in. Freddie’s latest quarterly financials show assets that have a small ‘t’ in front of the number (that’s short for ‘trillions’), so it looks like they aren’t about to go out of business. In fact, whenever one of today’s Minneapolis home loans is originated, Freddie or Fannie are probably in the wings. They remain the big guns in the U.S. secondary home loan market, which is so huge its repercussions are felt globally.