Fannie Mae case study

Fannie MaeThe Federal National owe Association (Fannie Mae) was formed by the Congress in 1938 to bolster the housing industry during the providence ?Depression?. In the meantime, the Federal Home Loan mortgage Corporation (Freddie Mac) was authorized to purchase the first lien, fixed-rate naturalized owe adds. It was later chartered by Congress in 1970 under(a) rubric III of the Emergency Home Finance performance to securitize conventional residential mortgage loans. The main objective of Fannie Mae is to exempt the approachability and affordability of homeownership for the low- and middle-income homebuyers. Fannie Mae and Freddie Mac became overtly traded companies in later years, with the committee to friend more families achieve the dream of homeownership. Fannie Mae and Freddie Mac ar too known as the Government Sponsored Enterprises (GSEs). Fannie Mae and Freddie Mac hire their essential function confined to the management of direct loans. Although these ii a gencies were previously allowed to lend money directly to mortgage borrowers, and concur them in their portfolios, they argon now specifically prevented from engaging in mortgage origination. Fannie Mae and Freddie Mac are also assigned a popular mission to provide special assistance to fend sure subsidized housing programs.

The major activities among Fannie Mae and Freddie Mac are to presently engage the provision of ?default insurance? or ?loan guarantees? to mortgage investors, commonly known as the Mortgage-backed securities (MBS). This protects investors from losings overdue to mortgage default and late payments. With the assurance that well timed(p) fire and principal payment s are received, it becomes more attractive f! or public and institutional investors to invest in. This eventually enables mortgage lenders to replenish monetary option and to originate new loans. Thus, mortgages funding home purchases will systematically be available and affordable to homebuyers in every field across the USA. Both Fannie Mae and Freddie Mac are... If you want to get a full essay, order it on our website: OrderEssay.net

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