What is Fannie Mae
The FNMA (Federal National Mortgage Association) is popularized as Fannie Mae. It was established in the year 1938 during the period of Great Depression. It is a type of security that is issued by FNMA and is provided security by a group of conventional mortgages which are federally insured.
The prime aim of Fannie aim is to provide stability, affordability and liquidity to the US Mortgage and Housing markets thereby helping communities and families of US. It is an enterprise sponsored by the Government (GSE), employed by Congress and owned by the stockholders. Fannie Mae is found to operate only in market dealing with Secondary mortgage which means that it purchases mortgage loans and does not have any direct transaction with the consumers. The loans are bought from lenders.
Hence, it is seen that Fannie Mae does not show any direct involvement in the market dealing with primary mortgage. This was created by the US Congress with the objective of working on behalf of consumers of America in association with Federal Government. This is also a GSE and enjoys full support of US government. Since they are owned by the share holders, its operation and assets are not controlled directly by the government.
Unlike other enterprises they are not owned by the government but shareholders. But after the mortgage crisis that was witnessed in the year 2007, Fannie Mae has been placed under the conservatorship of federal government. This entitles full control and authority to the government over both its assets and operations.
The prime purpose of this loan is to ease out the life of American consumers especially looking forward to purchasing their own house. Mortgage loans that are given out often tie up the funds for several years. This often prevents the availability of new loans due to the lack or shortage of funds. When these loans are sold to Fannie Mae, Funds are generated which helps in the availability of new loans. More the funds, less is the cost incurred on borrowing and hence American consumers find purchasing of homes more affordable.
The loans that are owned by Fannie Mae often avail additional benefits from the government. Such benefits are exclusively meant for Fannie owned loans and those not owned by them are barred from the privileges. In order to find out which services are offered to you, it is essential for you to contact your loan servicer.
A program called Deed-for-lease is also offered by Fannie Mae and is offered to those who are not qualified for modification programs or refinance. This deed offered by Fannie Mae gives the privileges to the homeowners to pass on the deed of their home to their respective lenders.