Federal Housing Finance Agency, which regulates Freddie Mac and Fannie Mae, announced today that the government-sponsored mortgage purchasers would delist themselves from the NYSE.
Fannie and Freddie were created to expand the secondary market for mortgages. They buy mortgages and securitize them, then sell the securities in the open market, thus freeing up money for new loans to be made to homeowners. The AP quotes a trade publication as saying that Fannie, Freddie, the FHA and the VA backed nearly 97% of home mortgages in the first quarter of this year.
The government took over the mortgage-backers in the wake of the 2008 Wall Street meltdown and taxpayers have been pouring money into them ever since.
The Associated Press claims not to be shocked by the move.
The move to delist the shares isn’t a surprise. The crash in the housing market has pounded Fannie Mae and Freddie Mac with heavy loan losses since 2007. Fannie shares have been below the $1 average price level for 30 trading days. NYSE rules require a company to take action to boost its shares or delist.