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To: Elizabeth Andrews who wrote (13109)	6/26/2003 4:57:33 PM
From: jrhana	Respond to of 39344

I guess they are mainly increasing purchasing and real estate leveraging power so to speak I do believe that the person who uses the loan to pay off higher priced debt is the exception

To: Elizabeth Andrews who wrote (13109)	6/26/2003 6:32:14 PM
From: aknahow	Read Replies (3) \| Respond to of 39344

Absolutly not reserve banks, Absolutly not reserve banks. Ginny mae is a direct agency of the federal government while Fanny and Freddie are indirect agencies. All were charted with the aim of facilitating the home mortgage business. They establish rules as to what constitutes a conforming mortgage and then buy these mortgages from financial institutions, banks, S & L s and credit unions. These mortgages are repackaged and sold as pass through securities or CMO's. Fanny and Freddy raise capital also by selling stock and various types of debt securities. There is no creation of money. None of the 3 are banks. It is just as you posted, leverage of balance sheets but no creation of money. Throwing in a lot of info about the repo and reverse repo business using securities which may include mortgage backed securities has nothing to do with the creation of money by the issuers of these mortgage backed securities themselves, in-spite of any grace used in posting.