GSE involvement in the wrapping of subprime mortgage- and home-equity loan-backed asset-backed securities is viewed by some as an encroachment beyond the bounds of the agencies' Congressional charters, which bear an implicit guarantee from the U.S. government.

But Freddie Mac, on the other hand, views its limited participation as an insurer of mortgage-related ABS as helping to create standards in a sector of the market where business practices, such as predatory lending, threaten all involved.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.