Mortgage Meltdown

Mortgage Meltdown examines the historical development and modern role of Fannie Mae in the U.S. housing finance system, tracing how a New Deal–era mortgage association evolved into a government-sponsored enterprise central to the secondary mortgage market. It explains core mechanisms of residential mortgages, securitization, mortgage-backed securities, and the guaranty model that supports investor liquidity, then follows key policy and regulatory turning points from Fannie Mae’s creation in 1938 through privatization in 1970 and the expansion of its market influence. The book places Fannie Mae’s operations in the context of the 2008 financial crisis, describing how incentives, regulation, competition from private-label securitization, and rising foreclosures contributed to systemic vulnerability and taxpayer exposure. It reviews major post-crisis reform efforts and outlines policy proposals focused on limiting public liability, restructuring servicing and risk management around delinquent loans, and supporting homeownership through measures that address lending practices and housing supply constraints. Written for readers interested in housing policy, financial regulation, and real estate finance, the approach is analytical and explanatory, combining market structure primers, historical narrative, and policy-focused discussion to map past outcomes and evaluate possible reforms.