Fannie Mae (FNMA) Company Brief

Shares of mortgage giant Fannie Mae (OTC: FNMA) are down in today’s trading. The stock touched a low of $0.28, after opening at $0.31 today. At last check, it was down 4.41% to $0.301, with volume at 13.85 million.

The penny stock of Fannie was delisted from the New York Stock Exchange, last week. The mortgage company was asked to delist its shares after the stock fell below the minimum requirement of the exchange. The Federal Housing Agency had announced last month that Fannie’s shares had traded below the $1 average price level for 30 trading days and so the penny stock had to be delisted from the exchange.

Subsequently, shares of Fannie started trading over the counter from July 8 under a new symbol. Since its delisting, the penny stock has surged almost 90% trading over the counter. On Tuesday, the penny stock had closed 33.52% higher at $0.3605 on above average volume.

Fannie was chartered by the U.S. Congress to provide liquidity and support in the mortgage markets. The company was set up to buy mortgages from banks, package them as securities and resell them to investors. The idea was that this would provide mortgage originators with freed up capital which in turn would allow them to lend more. Also, the resold mortgages would assist in spreading the risk in the market.

Fannie suffered huge losses when the housing bubble bust. The company was bailed out by the U.S. government. Fannie saw its share price plunge from above $60 in 2007 to the penny region in September 2008.

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