<P> By way of contrast, during 1991--2007, commercial banks' average annual loss rate on single - family mortgages was about 15 basis points . During 2008--2011, annual losses were 184 basis points . </P> <P> The FHFA study compares, on an apples - to - apples basis, GSEs loan originations with those for private label securitizations . The study segments loans four ways, by adjustable - rate mortgages (ARMs) - versus - fixed - rate, as well as by vintage, by FICO score and by loan - to - value ratio . In almost every one of 1800 different comparisons covering years 2001 through 2008, GSE loan performance was exponentially better . On average, GSE fixed - rate loans performed four times better, and GSE ARMs performed five times better . </P> <P> However, other critics in D.C. claim that the GSE business model faces inherent conflicts due to its combination of government mission and private ownership . The GSEs were given monopoly privileges against which private enterprise could not compete . Both GSEs had a line of credit with the US Treasury Department, and both GSEs were exempt from state and local income tax on corporate earnings . The GSEs were the only two Fortune 500 companies exempt from regulation by the Securities and Exchange Commission . Because of implicit government backing, Fannie Mae discount notes became the second - largest short - term notes issued (second only to Treasury bills). </P> <P> The American Enterprise Institute, a conservative think - tank, argues that "the government mission required them to keep mortgage interest rates low and to increase their support for affordable housing . Their shareholder ownership, however, required them to fight increases in their capital requirements and regulation that would raise their costs and reduce their risk - taking and profitability . But there were two other parties--Congress and the taxpayers--that also had a stake in the choices that Fannie and Freddie made . Congress got some benefits in the form of political support from the GSEs' ability to hold down mortgage rates, but it garnered even more political benefits from GSE support for affordable housing ." However, such claims were at odds with the majority report of the Financial Crisis Inquiry Commission (FCIC). </P>

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