Who are Fannie Mae and Freddie Mac?
NEW YORK (Reuters) - To some people, Fannie Mae and Freddie Mac sound more like doting grandparents than twin U.S. mortgage finance giants, which together fund about half of the country's homes.
"I think of my grandmother and grandfather when I hear those names," said Phyllis Douglas, 52, from Brooklyn, as she walked through Times Square in New York City.
The names, however, are simply described by both companies as creative spins on the acronyms for their original names -- the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
It seems to be widely accepted that Fannie Mae came from the pronunciation of its initials, FNMA, and that Freddie Mac seemed a natural fit as a name for a sibling company when it was created in 1970 -- 42 years after Fannie, and two years after Ginnie Mae (Government National Mortgage Association).
But who first coined any of the names seems to remain somewhat of a mystery.
Fannie and Freddie are seen as vital for stabilizing the worst housing slump since the Great Depression some 80 years ago. But as mortgage defaults rise even among borrowers with seemingly solid credit, concerns have grown that the two agencies may need more money to cover heavier losses, prompting the U.S. government to pledge support for the companies.
(Reporting by Michelle Nichols and Nancy Leinfuss; Editing by Eric Beech)
