Shaky Ground: The Strange Saga of the U.S. Mortgage Giants

Fannie Mae and Freddie Mac were created by Congress to serve the American Dream of homeownership. By the end of the century, they had become extremely profitable and powerful companies, instrumental in putting millions of Americans in their homes.

So why does the government now want them dead?

In 2008, the U.S. Treasury put Fannie and Freddie into a life-support state known as ＂conservatorship＂ to prevent their failure-and worldwide economic chaos. The two companies, which were always controversial, have become a battleground. Today, Fannie and Freddie are profitable again but still in conservatorship. Their profits are being redirected toward reducing the federal deficit, which leaves them with no buffer should they suffer losses again. China and Japan are big owners of Fannie and Freddie securities, and they want to ensure the safety of their investments-which helps explain why the government is at an impasse about what to do. But the current state of limbo is unsustainable.

Based on comprehensive reporting and dozens of interviews, Shaky Ground chronicles the story of Fannie and Freddie seven years after the meltdown, and tells us why homeownership finance is now one of the biggest unsolved issues in today’s global economy-and why it must be placed on firmer ground.

Bethany McLean is an investigative journalist known for her work on the Enron scandal and the 2008 financial crisis. In 2001 as a young reporter at Fortune magazine, where she eventually became an editor at large, she wrote ＂Is Enron Overpriced?,＂ one of the first skeptical articles about Enron. After the company collapsed into bankruptcy, she coauthored the bestseller, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron with her Fortune colleague Peter Elkin. A documentary based on the book was nominated for an Academy Award in 2006. Her most recent book, which she coauthored with New York Times columnist Joe Nocera, is All the Devils Are Here: The Hidden History of the Financial Crisis. Prior to joining Fortune she had been an investment analyst at Goldman Sachs. She is a contributing editor at Vanity Fair, a columnist for Fortune.com and a contributor to CNBC. A graduate of Williams College, she lives in Chicago.