Strategies of Banks and Other Financial Institutions

Cases on Mortgage Institutions and Credit Unions

2.1 Mortgage Institutions

2.1.1 Fannie Mae

The Federal National Mortgage Association (FNMA), commonly called Fannie Mae, was established as a federal agency in 1938 and is the major source of residential mortgage credit in the US secondary market. The main function of Fannie Mae is to guarantee and purchase loans from mortgage lenders to facilitate people buying homes or refinancing purchases of homes. Fannie Mae’s charter does not permit it to originate loans or lend money directly to consumers in the primary mortgage market. Instead, Fannie works with mortgage bankers, brokers, and other partners in the mortgage market, thereby ensuring that funds are lent to home buyers at affordable rates. ...