The secondary mortgage market is a huge piece of Americas real estate market. The secondary mortgage market allows bank to sell mortgages to certain investors and government lending agencies. This is where both Fannie Mae and Freddie Mac come into play.
Although the names of both of these agencies sound similar there is one key difference between the two agencies. Let's look at what each of these agencies has to do with the mortgage and housing industry.
Fannie Mae
Fannie Mae also known as the Federal National Mortgage Association, is an enterprise that is government-sponsored, they are in the mortgage loan business, buying mortgages from larger banks and selling them as mortgage backed securities or agency bonds. The mortgages Fannie Mae tend to purchase are from commercial bonds. …show more content…
Generally it was established to help keep banks afloat, giving homeowners the chance to pay lower downpayments over a longer period than were once acceptable. By Fannie Mae buying these loans from banks, banks could continue to lend to other
Although the names of both of these agencies sound similar there is one key difference between the two agencies. Let's look at what each of these agencies has to do with the mortgage and housing industry.
Fannie Mae
Fannie Mae also known as the Federal National Mortgage Association, is an enterprise that is government-sponsored, they are in the mortgage loan business, buying mortgages from larger banks and selling them as mortgage backed securities or agency bonds. The mortgages Fannie Mae tend to purchase are from commercial bonds. …show more content…
Generally it was established to help keep banks afloat, giving homeowners the chance to pay lower downpayments over a longer period than were once acceptable. By Fannie Mae buying these loans from banks, banks could continue to lend to other