Lenders use the cash raised by selling mortgages to the Enterprises to engage in further lending. They provide liquidity (ready access to funds on reasonable terms) to the thousands of banks, savings and loans, and mortgage companies that make loans to finance housing.įannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold. They perform an important role in the nation’s housing finance system – to provide liquidity, stability and affordability to the mortgage market. Fannie Mae and Freddie Mac were created by Congress.
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