The government's implied guarantee of Fannie Mae and Freddie Mac is encouraging them to delve into businesses outside their central mission, according to a Congressional Research Service report.

The government-sponsored enterprises provide liquidity to the mortgage market by purchasing loans from mortgage bankers. Though they are private corporations, it is generally believed that if they got into trouble, the federal government would bail them out. This lets them borrow at rates lower than even the healthiest corporations.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.