mortgages backed by fannie/freddie far superior to private label

The Federal Housing Finance Agency (FHFA) released data yesterday on Fannie Mae and Freddie Mac, comparing credit quality and performance of the loans they acquired (from 2001-2008) versus loans financed with private-label mortgage-backed securities.

As you can see, Fannie and Freddie’s loans were of much better quality, and performance followed suit.