Fannie Mae and Freddie Mac purchase mortgages from lenders and then turn around and sell them to investors with a "guarantee against default". Although, the government purchased Fannie Mae and sibling company Freddie Mac in 2008, keeping Fannie Mae in business has cost them $126 billion to date.

Fannie Mae is now tightening the lending standards for adjustable rate mortgages as well as interest only loans by requiring lenders to calculate how high a borrower's mortgage payment could rise after the "teaser" rates expire. Teaser rates are a temporary low rate introduced to a borrower on an adjustable rate mortgage or a credit card. Interest only loans will now require borrowers to have a down payment of at least 30% AND enough assets for two months of living expenses.

As interest only loans and adjustable rate mortgages are the types of loans that aided in the real estate crisis, it is crucial to Fannie Mae that history does not repeat itself. According to Marianne Sullivan, Senior VP of Single Family Credit Policy and Risk Management at Fannie Mae, "Our goal is to make sure consumers can sustain their mortgages and remain in their homes over the long term."