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Slate mag on the other mortgage giant
There’s an interesting article in Slate for people, like me, who aren’t immersed in the world of Fannie Mae and Freddie Mac, and thus have a lot to learn. Titled "Freddie and Fannie’s Healthy Cousin," it’s covers the FHLB.
For the past 12 months, an obscure agency created by President Herbert Hoover during the Great Depression has come to the rescue of the banking industry. It is called the Federal Home Loan Banks.
Like Fannie Mae and Freddie Mac, the FHLB is a government-sponsored enterprise. But it differs from the wounded giants in some significant ways. Instead of being owned by public shareholders, as Fannie and Freddie are, the 12 independent regional FHLBs are owned by their 8,100 members.
(If you want just an overview of the FHLB, Slate links to one.)
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Andrew - Thanks, good stuff. Seems they pay a bit more attention to “risk assessment” than their cousins.
Think this says it all, “FHLB has a much better track record than Fannie and Freddie. Because it maintains high standards, it has never suffered a credit loss on a loan extended to a member. It doesn’t spend hundreds of millions of dollars each year on executive compensation or lobbying, as Fannie and Freddie did. And it didn’t lower standards or shift into riskier markets as a way of increasing market share.”