For the majority of mortgages continued to enjoy an implicit guarantee from the government-sponsored trio of Fannie, Freddie or Ginnie, meaning that bonds which used those mortgages as collateral could be represented as virtually government bonds, and hence 'investment grade'.
Niall Ferguson's book "The Ascent of Money" discusses the stability of the mortgage market, particularly how most mortgages benefited from an implicit government guarantee through entities like Fannie Mae, Freddie Mac, and Ginnie Mae. This backing made the bonds that relied on these mortgages as collateral nearly equivalent to government bonds, lending them a sense of security and reliability in the eyes of investors.
This situation allowed these bonds to be classified as 'investment grade,' meaning they were seen as low-risk investments. The structural relationship between mortgages and government backing highlights a significant aspect of the financial system, illustrating how government involvement can influence the perceived quality and stability of financial products in the market.
