what is fannie mae and freddie mac wiki?
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In 1970, the federal government authorized Fannie Mae to purchase conventional loans, i.e. those not insured by the FHA, VA, or FmHA, and created the Federal Home Loan Mortgage Corporation (FHLMC), colloquially known as Freddie Mac, to compete with Fannie Mae and thus facilitate a more robust and efficient secondary ...
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However, all conventional loans have to meet certain guidelines set by Fannie Mae and Freddie Mac. These include a 620 credit score, a debt-to-income ratio lower than 43%, and at least a 3% down payment. The mortgage also has to be within conventional loan limits: up to $510,400 in most areas.
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Fannie Mae does not originate or provide mortgages to borrowers. But it does purchase and guarantee them through the secondary mortgage market. In fact, it's one of two of the largest purchasers of mortgages on the secondary market.
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Unlike the FHA, Fannie Mae and Freddie Mac do not insure loans given by lenders. Instead, they buy mortgage debts from banks and other financial institutions. ... As a result, the mortgage-backed securities that Fannie Mae and Freddie Mac sold were increasingly risky, with a far higher rate of default.
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Fannie Mae stands for the Federal National Mortgage Association. Freddie Mac is the Federal Home Loan Mortgage Corporation. ... For example, Fannie Mae buys mortgages from large retail banks while Freddie Mac buys them from smaller thrift ones. But both help banks make more loans and keep interest rates low.
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The key comparisons of the loans are that a FHA loan has a lower credit score requirement that is lower to qualify and a 3.5 percent down payment which may be less than a Fannie Mae loan. The Fannie Mae loan has a higher credit score requirement at 620 to 640 which is higher than the FHA loan.
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Quicken Loans is the largest online retail mortgage lender, according to National Mortgage News. Its parent company is Rock Holdings, Inc. Quicken provides only mortgages and loans - it doesn't offer any banking, investment or other financial products.
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Before we submit every loan, we first MUST get an “automated approval” from “DO” or “DU” (Fannie Mae's “Automated Underwriter”), or from “LP” (Freddie Mac's “Automated Underwriter”). “DO” stands for Desktop Originator and “DU” stands for Desktop Underwriter – both names are used interchangeably and mean the same thing.
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Fannie Mae is another name for the Federal National Mortgage Association (FNMA), which the government created in 1938. ... The primary business of both Fannie Mae and Freddie Mac is to purchase home loans from lenders so lenders can replenish their supply of capital funds and make more mortgage loans to borrowers.
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What are jumbo mortgages? Jumbo mortgages are those with loan sizes above the maximum that is subject to guarantee by Fannie Mae and Freddie Mac, currently $510,400 in most markets and up to $765,600 in designated high-cost markets, says Greg McBride, chief financial analyst for Bankrate.
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Fannie Mae (the Federal National Mortgage Association) is sponsored by the U.S. government and can issue and guarantee MBS issues. ... It does not issue MBSs, and its guarantees are backed by the full faith and credit of the U.S. government. Furthermore, Ginnie Mae guarantees MBS issues from qualified private institutions.
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A conforming loan is one that adheres to the size limits used by Freddie Mac and Fannie Mae, the two U.S. corporations that purchase mortgage loans. So no, an FHA loan is not the same as conventional.
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Some CMOs are guaranteed by the Government National Mortgage Association (GNMA or Ginnie Mae), and agency of the U.S. government or by U.S. government sponsored enterprises such as the Federal National Mortgage Association (FNMA or Fannie Mae) or the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac).
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['A basic requirement was a mortgage owned or guaranteed by Freddie Mac or Fannie Mae, closed on or before May 31, 2009. ... ', 'The original loan must have had an LTV ratio of at least 80%.']
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FHA loans are insured for the lender, not for the borrower, meaning if the homeowner is forced to default on the loan, the FHA assumes responsibility for protecting the loan and thus the lender. Federal Home Loan Mortgage Corp (Freddie Mac) and Federal National Mortgage Association (Fannie Mae).
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There are three main types of mortgages: conventional mortgages, which are backed by Fannie Mae and Freddie Mac; FHA loans, which are designed for low income or credit poor individuals and are backed by the Federal Housing Administration; and VA loans, which are for veterans and are backed by the Department of Veterans ...
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Banks structure their own loan programs within guidelines set by Fannie Mae, Freddie Mac, FHA and VA. ... Unlike a mortgage “broker,” the mortgage company still closes and funds the loan directly. Because these companies only service mortgage loans, they can streamline their process much better than a bank.