The down-low on Fannie and Freddie

As we reported today about President Obama’s speech in Phoenix on the housing market, and specifically on Fannie Mae and Freddie Mac, we realized there’s a lot of conflicting information out there about how much of the mortgage market Fannie and Freddie are actually responsible for.

Some say just 50 percent; others say as much as 90 percent.

The New York Times quoted an Obama Administration official saying , “the government guarantees more than 80 percent of all mortgages through Fannie Mae and Freddie Mac and F.H.A.”

So what’s going on here?

I got a clear answer from Edward J. Pinto of the American Enterprise Institute. Pinto used to work as the chief credit officer  at Fannie Mae, and he keeps a close eye on his former employer. He says people often conflate Fannie and Freddie with other government agencies, such as the Federal Housing Administration, the Department of Veterans Affairs and the Department of Agriculture.

Pinto says if you look at the agencies separately, of all the mortgages outstanding in the market right now, Fannie and Freddie are responsible for about 55 percent, other government agencies are responsible for about 15 percent, and the private label market is responsible for the remainder. 

Pretty simple, math, it seems. (Thanks, Ed!)