What is Fannie Mae's main function in the mortgage market?
Direct lending
Securitizing mortgage loans
Regulating mortgage lenders
Setting mortgage rates
Answer
Fannie Mae's main function is to securitize mortgage loans by purchasing mortgages from lenders, bundling them together, and selling them as mortgage-backed securities (MBS) to investors. This process helps increase the availability of mortgage credit and reduces the reliance on local savings and loan associations.
The Fannie Mae Quiz: How Well Do You Know this Government-Backed Financial Services Company?
More Questions
What is the relationship between Fannie Mae and Freddie Mac?
What event led to Fannie Mae being placed under government conservatorship?
What type of loans does Fannie Mae primarily purchase?
Who oversees Fannie Mae's operations?
What type of investors typically buy Fannie Mae's mortgage-backed securities?
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