Mortgage Industry Structure Flashcards
What is Fannie Mae?
The Federal National Mortgage Association (Fannie Mae) - Founded in 1938 during the Great Depression as part of the New Deal,[2] the corporation’s purpose is to expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities (MBS),[3] allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations (or “thrifts”).[4
What is Freddie Mac?
The Federal Home Loan Mortgage Corporation (Freddie Mac) - The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with the Federal National Mortgage Association (Fannie Mae), Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market.
What is Ginnie Mae?
The Government National Mortgage Association (Ginnie Mae) - It was founded in 1968 and works to expand affordable housing by guaranteeing housing loans (mortgages) thereby lowering financing costs such as interest rates for those loans.
Why were these enterprises created?
They were created to facilitate homeownership and mortgage financing in the United States.
What depoartments is part of Ginnie Mae?
It is part of the Department of Housing and Urban Development (HUD).
