Fannie Mae and Freddie Mac come by their quasi-governmental reputation honestly.  Though these are private corporations owned by shareholders, they are subject to oversight by the Office of Federal Housing Enterprise Oversight (OFHEO), whose operation the government funds by assessing a fee on Fannie Mae and Freddie Mac.  The two corporations underwrite more mortgages than any other financial institution in the U.S.  Now the government has decided to help them out.

As Vikas Bajaj reports in the New York Times, OFHEO has decided to increase the total worth of investments that Fannie (formally the Federal National Mortgage Association) and Freddie (the Federal Home Loan Mortgage Corporation) can hold, which should encourage these companies to purchase and hold some of the larger and riskier mortgages that present a threat to the stability of the mortgage market.  The corporations have recently "regained their central role in mortgage finance."  Read Bajaj here. 

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