The first African American CEO of a Fortune 500 corporation, Franklin D. Raines was named chairman and CEO of Fannie Mae on January 1, 1999. Under his leadership, Fannie Mae—short for the Federal National Mortgage Association—remained a major player in what Raines called the “American Dream Business,” ( Financial Times , October 29, 2002) continued its record of double-digit operating income growth, expanded its product and technology leadership, and committed to invest $2 trillion to finance affordable homeownership and rental housing for 18 million families.
In 2003, with revenues of $53.8 billion, Fannie Mae was the number one source for home mortgage financing in the United States, providing liquidity in the mortgage market by buying mortgages from lenders and packaging them for resale, transferring risk from lenders and allowing them to offer mortgages
to those who may not otherwise qualify. Fannie Mae was one of several government-sponsored enterprises, which were stockholder-owned companies created by Congress to carry out a public-policy purpose with private capital. Fannie Mae bought home loans from banks and other mortgage lenders, providing those lenders with a fresh supply of cash to make new loans. Fannie Mae also invested in mortgage-backed securities. It benefited from low interest rates, tax exemptions, and an implicit guarantee of federal support.