Fannie and Freddie are government backed entities that keep mortgages moving, allowing homeowners to purchase homes. The plans are to delist their shares from the New York Stock Exchange.
The companies' regulator, the Federal Housing Finance Agency, said Wednesday that it expects Fannie Mae and Freddie Mac shares to trade on the Over-the-Counter Bulletin Board.
Fannie, Freddie, VA, and FHA have backed almost 97% of home mortgages this year. In the past it was the folks on Wall Street that hedged their beats but pulled out of the market years ago when they did not have enough liquidity to support the asset. We soon saw the tightening of the mortgage market with Wall Street gone and now mostly left with government sponsored programs which took over Fannie and Freddie in 2008. If it was not for these programs we would have had a severe crash.
The move to delist the shares isn't a surprise since Fannie has had a $1 average price level for 30 trading days. NYSE rules require a company to take action to boost its share price or delist.
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