The Secondary Mortgage MarketChapter 121
Introduction to Secondary Market• Originators of new loans are called primary lenders• Most loans created by primary lende...
Federal Housing Financing Agency                 (FHFA)• Regulates Fannie Mae, Freddie Mac, and  Federal Home Loan Bank (F...
Fannie Mae• Shareholder-owner company• Purchases mortgages; enters into servicing  agreement• Sells mortgages in open-mark...
Underwriting Standards for Conventional Loans Sold to                    Fannie Mae• Conforming and nonconforming loans• A...
Freddie Mac• Created to provide secondary mortgage  market for lending institutions that were  members of the Federal Home...
Ginnie Mae• Government National Mortgage Corporation,• Mission is to expand affordable housing by  linking domestic and gl...
Upcoming SlideShare
Loading in …5
×

Ch 12 the secondary mortgage market

487 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
487
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Ch 12 the secondary mortgage market

  1. 1. The Secondary Mortgage MarketChapter 121
  2. 2. Introduction to Secondary Market• Originators of new loans are called primary lenders• Most loans created by primary lenders are sold in the secondary market – Lenders acquire money for new loans; avoid the risk of holding long- term fixed interest loans – Emergence of securitization of pools of mortgage loans2
  3. 3. Federal Housing Financing Agency (FHFA)• Regulates Fannie Mae, Freddie Mac, and Federal Home Loan Bank (FHLB)• Goal is to restore confidence in Fannie Mae and Freddie Mac; enhance their ability to fulfill their mission3
  4. 4. Fannie Mae• Shareholder-owner company• Purchases mortgages; enters into servicing agreement• Sells mortgages in open-market transactions• Administered price system• Mortgage-backed securities (MSBs)4
  5. 5. Underwriting Standards for Conventional Loans Sold to Fannie Mae• Conforming and nonconforming loans• Automated underwriting system• Credit scoring5
  6. 6. Freddie Mac• Created to provide secondary mortgage market for lending institutions that were members of the Federal Home Loan Bank System• Generally follows Fannie Mae’s underwriting standards6
  7. 7. Ginnie Mae• Government National Mortgage Corporation,• Mission is to expand affordable housing by linking domestic and global capital markets to the nation’s housing markets• Offers mortgage backed securities (MSBs) – Pass-through certificates7

×