The Secondary Mortgage Market Flashcards
Secondary Market
Where closed and funded mortgage loans are bought and sold between mortgage lenders, banks and investors throughout the world
Government Sponsored Enterprises
Three main players in the secondary market to include Freddie Mac, Fannie Mae, and Ginnie Mae
Mortgage Backed Security
GSE’s buy mortgages underwritten to specific guidelines and create a bond
Conforming Loans
Loans underwritten to Fannie and Freddie’s guidelines.
Ginnie Mae
Doesn’t have specific guidelines, but instead guarantees government loans (FHA, VA and USDA)
Securitization
Process by which a bond is created through the pooling of loans together under common Freddie/Fannie standards then sold as a financial instrument in the market with a steady stream of cash flows.
High Priced Mortgage Loans (HPMLs)
New name for sub prime loans
