Fannie Mae And Freddie Mac Flashcards, test questions and answers

Discover flashcards, test exam answers, and assignments to help you learn more about Fannie Mae And Freddie Mac and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Fannie Mae And Freddie Mac and get quick solutions for your test.

What is Fannie Mae And Freddie Mac?

Fannie Mae and Freddie Mac are two government-sponsored enterprises (GSEs) that were created in 1938 and 1970 respectively. They provide a secondary market for mortgages, which helps to keep mortgage interest rates low and provides liquidity to the housing market. Fannie Mae and Freddie Mac are also the largest sources of money for home loans in the United States.Fannie Mae’s primary mission is to make home ownership more accessible by providing financial products that help lenders provide credit to qualified borrowers who might not otherwise qualify for a loan. It does this through buying, packaging, and reselling mortgages on the secondary market. By doing so, Fannie Mae helps keep mortgage interest rates low by providing additional capital into the housing market. In addition, it also provides affordable housing options through its Community Home Buyer Program and its HomePath program, which provides incentives for certain buyers such as first-time homebuyers or those with limited incomes. Freddie Mac’s mission is similar to that of Fannie Mae’s but with some differences. Unlike Fannie Mae, Freddie Mac does not make direct loans but rather purchases mortgages from lenders on the secondary market after they have been originated by lenders on behalf of borrowers; this increases liquidity within the mortgage markets and reduces borrowing costs for consumers. Additionally, Freddie Mac also offers various other programs designed to help facilitate access to affordable housing such as offering grants or reduced mortgage origination fees to certain types of borrowers or providing funds directly towards down payments or closing costs when necessary. Due in part to their roles in making homeownership easier and more affordable across America, Fannie Mae and Freddie Mac experienced tremendous growth during their respective histories; however they ultimately fell victim to the 2008 financial crisis due largely due mismanagement at both entities prior to 2007-2008. As a result they were placed under conservatorship by American Government where they remain today with oversight from Federal Housing Finance Agency (FHFA). Despite their status as government sponsored entities (GSE), there has been much debate over whether their roles should be preserved or privatized moving forward given concerns over taxpayer risk associated with them being backed by U S Treasury Department especially considering their past problems leading up crisis of 2008.