Chapter One Flashcards
Mortgage
a written instrument using real property
to secure repayment of a debt.
Primary market
where borrowers and lenders
come together to negotiate terms for mortgages. It is
where we, as consumers, obtain mortgages
Commercial Banks
Variety of financial services
Mortgage Broker
Company or individual who, for a
fee, places loans with lenders, but does not service
such loans
Mortgage Banker
Company, individual, or entity that
originates, processes, underwrites, closes/funds, and
services mortgage loans.
Savings and Loan Associations
(Thrifts)
Credit Unions
Cooperative financial
institutions owned and controlled by their
members.
Finance Companies
Specialize in making
higher-risk loans at higher interest rates.
Mutual Savings Banks
State-chartered
banks that are owned by depositors
(Thrifts).
Secondary Market
where existing
mortgage loans are bought and sold
Types of Secondary Market
- Fannie Mae
- Freddie Mac
- Ginnie Mae
- The Federal Home Loan Bank System
- Private investors
Types of Primary Market
Mortgage Banker
Mortgage Broker
Commercial Banks
Savings and Loan Associations (Thrifts)
Credit Unions
Finance Companies
Mutual Savings Banks
Fannie Mae
- Created in 1938 as a means to assist the housing sector in the midst of the Great Depression. –Federal National Mortgage Association (FNMA). –Fannie Mae is a Government-Sponsored
Enterprise (GSE) that acts as a quasi-
governmental agency for the purpose of
making a secondary market for mortgages.
– Fannie Mae is the nation’s largest
mortgage investor.
Freddie Mac
Freddie Mac is the second major GSE.
Freddie Mac was created by Congress in 1970
to provide a secondary market for mortgages
originated by savings and loan associations.
–Its full name is the Federal Home
Loan Mortgage Corporation (which
sometimes appears in abbreviated
form as “FHLMC”).
Ginnie Mae
Ginnie Mae - Created by Congress in 1968,
Ginnie Mae is now part of the Department of
Housing and Urban Development (HUD).
– It does not purchase or sell loans on the secondary
market.
– Ginnie Mae does the same things as Fannie Mae and
Freddie Mac except that Ginnie Mae is a government-
owned entity.
– Rather, Ginnie Mae issues guarantees on bond pools
that are comprised exclusively of government-backed
(FHA/VA/USDA) loans.
– Its full name is the Government National Mortgage
Association (sometimes abbreviated as “GNMA”).
A ____________ is a written instrument using real property to secure repayment of a debt
Mortgage
Company or individual who, brings borrowers and lenders together for loan origination on the primary market is a ______
Mortgage Broker
When borrowers and MLOs come together to negotiate terms and close mortgage loan transactions, this is referred to as
The primary mortgage market
Which statement about Ginnie Mae is TRUE?
Ginnie Mae guarantees mortgage-backed securities
Which of the following government sponsored enterprises (GSE) holds the largest amount of home loan mortgages?
Federal National Mortgage Association
