Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Haim R. Branisteanu who wrote (133387)	11/7/2001 11:07:47 PM
From: LLCF	Read Replies (1) of 436258

<Jeff, the problem is that FNM does not hold the mortgages or a very little part of it. It is all securitized. > This is incorrect... from FNM's profile: "Fannie Mae does not directly lend money to homebuyers, but works with lenders to make sure that there is no shortage of funds available for mortgage loans. The method in which Fannie Mae accomplishes this is by purchasing mortgages from a variety of institutions that make up the primary mortgage market. Primary market lenders include mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies. These are the businesses where the mortgages are originated and the funds are loaned directly to the borrower. Fannie Mae then buys the mortgage, thus allowing the primary market lender to replenish their funds and lend more money to homebuyers." FNM holds massive amounts of 'conforming' home loans AND they then effectively insure the ones that ARE securitized... lord knows what the true liablility of THAT is if it was treated as the 'short put option' that it is. DAK

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