Fannie and Freddie, Back in the Black

Fannie Mae and Freddie Mac were among the biggest disasters of the financial crisis. In September 2008, nine days before Lehman Brothers failed, the federal government took over the mortgage companies; it eventually spent more than $187 billion bailing them out. For decades, the companies had provided an implicit government backstop to the U.S. mortgage market, buying loans from private lenders and guaranteeing payments to investors. That helped spur a steady rise in homeownership—until the subprime crisis hit and Fannie and Freddie were on the hook for billions in losses.

Lawmakers vowed to overhaul the companies and some planned to wind them down completely. But more than eight years later, Fannie and Freddie still operate under government control—and they’re now a bigger part of the system, guaranteeing payment on just under half of all U.S. mortgages, up from 38 percent before the crisis.