The NYSE plans to delist the shares of Fannie Mae and Freddie Mac. This means Fannie and Freddie Mac will no longer be traded on the New York Stock Exchange.
As of June 15, 2009, one share of Fannie Mae stock was selling at .92 cents while Freddie Mac shares were at $1.22.
In September of 2008 the Government took over both Fannie and Freddie when the housing bubble collapsed. So far taxpayers have poured $145 billion dollars into Fannie and Freddie to keep them afloat during the housing crisis and now they are being pulled from the NYSE.
What does this mean to you and I?
Well it means to date there is no confidence in our government running these two agencies and no market to sell these guaranteed mortgage back securities to private investors.
Remember Fannie and Freddie were created by Congress to buy mortgages from banks and then package them into bonds and sell them into the open market as mortgaged backed securities to investors. When the rating system of these mortgages collapsed and loans started to go into default then the market lost all confidence.
Today 31 million home loans worth $5.5 trillion dollars or half of all mortgages are guaranteed by Fannie and Freddie Mac.
When you see Congress debating over financial reform they are really debating over how to fix Fannie and Freddie as they are crucial to the success or failure of our housing market and banking markets.
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