Agency bonds

Agency bonds are those issued by Fannie Mae, Freddie Mac, and Ginnie Mae. Fannie Mae and Freddie Mac are stockholder-owned government- sponsored enterprises. Ginnie Mae is part of the Department of Housing and Urban Development. 

Alt-A mortgage 

Either a mortgage made to a borrower with a credit history between prime and subprime, or a mortgage made to a prime borrower with less than traditional documentation. 


American Recovery and Reinvestment Act of 2009, P.L. 111-5, 123 Stat. 115. 


Economic Stimulus Act of 2008, P.L. 110-185, 122 Stat. 613


Federal Housing Finance Agency. Regulator of housing GSEs for mission, safety and soundness. Created by merger of existing government agencies, including OFHEO and HUD staff (who formerly had mission regulatory authority). 


Government-sponsored enterprise


Government-sponsored enterprise credit facility. The Treasury’s program to lend money to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks using MBSs as collateral. This program expired December 31, 2009, and had been authorized by HERA. 


Housing and Economic Recovery Act of 2008, P.L. 110-289, 122 Stat. 2654


Mortgage-backed securities. A pool of mortgages sold to institutional investors. 


Office of Federal Housing Enterprise. Safety and soundness regulator for Fannie Mae and Freddie Mac. Merged into Federal Housing Finance Agency. 

Prime mortgage 

A mortgage made to a borrower with excellent credit history. 

Private-label MBSs

Mortgage-backed securities underwritten and sold by commercial and investment banks. They are not created by the GSEs or a government agency.

Senior preferred stock 

This stock is senior to (has priority over) all other common and preferred stock; it is the only GSE stock currently receiving dividends. 

 Subprime mortgage

 A mortgage made to a borrower with a blemished credit history.