Fannie Mae and Freddie Mac were created by Congress to serve the
American dream of homeownership. By the end of the century, they had
become extremely profitable and powerful companies, instrumental in
putting millions of Americans in their homes.
So why does the government now want them dead?
In 2008 the US Treasury put Fannie and Freddie into a life-support state
known as "conservatorship" to prevent their failure - and worldwide
economic chaos. The two companies, which were always controversial, have
become a battleground. Today, Fannie and Freddie are profitable again
but still in conservatorship. Their profits are being redirected toward
reducing the federal deficit, which leaves them with no buffer should
they suffer losses again. China and Japan are big owners of Fannie and
Freddie securities, and they want to ensure the safety of their
investments - which helps explain why the government is at an impasse
about what to do. But the current state of limbo is unsustainable.
Based on comprehensive reporting and dozens of interviews, Shaky
Ground chronicles the story of Fannie and Freddie seven years after the
meltdown and tells us why homeownership finance is now one of the
biggest unsolved issues in today's global economy.
