The importance of Fannie Mae and Freddie Mac

By
Real Estate Agent with Regency Real Estate Brokers

Fannie Mae and Freddie Mac not only insure mortgages, but they also create the lending guidelines that almost every lending institution in America abides by. So, even if a bank is not selling their loans to Fannie Mae or Freddie Mac, they surely are using the same underwriting tools and restrictions so that they have a marketable security for wall street to purchase. And yes, EVERY bank scrutinizes their mortgages on wall street. Even if the bank continues to service the loan. My lender Dean Rathbun assures me that if Fannie Mae and Freddie Mac went out of business, real estate as we know it today would cease to exist. Dean also sent me this great article below.

Interesting article on the NY Times website at http://www.nytimes.com/2008/07/14/washington/14fannie.html which explains how the FED indirectly and directly helps to keep these mega powers in existence. For the FED to intervene and make sure that money is available to these agencies shows how important they are to our economy and the way that America exists.

Comments (0)