New model for stability of Fannie Mae and Freddie Mac

In 2007, the American housing boom ended, and there was heightened risk of a housing crisis. Private securitizers withdrew from purchasing high-risk mortgages, while government-sponsored enterprises, Fannie Mae and Freddie Mac, dramatically increased their acquisitions of risky mortgages. By 2008, the agencies reversed course, decreasing their high-risk acquisitions.

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