Importantly, with the securitization market for privatelabel mortgage-backed securities shut down, Fannie Mae, Freddie Mac, and Ginnie Mae currently are the only conduits through which mortgages can be securitized and sold to investors. By contrast, in 2005, these three entities represented only about 50 percent of the securitization market.
The ability of Fannie, Freddie, and Ginnie to continue to securitize mortgages has largely depended on the confidence of investors that the government stands behind these organizations. As such, it was very significant when signs emerged in midsummer that investors were beginning to lose confidence in Fannie and Freddie.