Fannie Mae
Definition of "Fannie Mae"
Wondering who is this Fannie Mae person that your real estate agent always mentions when the subject about mortgage is brought up?
Fannie Mae is not a person, nor a Woody Allen female character – but the way people commonly refer to The Federal National Mortgage Association (FNMA).
But, to be fair, although it is not a person, to better understand Fannie Mae definition we need to tell its story as if we were telling a person’s life:
Fannie Mae was founded as a government-sponsored enterprise in 1938 as part of Franklin Delano Roosevelt administration’s “New Deal” on the aftermath of the Great Depression. The idea behind Fannie Mae was to inject federal money into privately owned banks to finance home mortgages and raise the levels of home ownership after so many Americans had their homes foreclosed on due to defaulting because of the economical crisis. Fannie Mae was an aggressive second mortgage market supporter that connected their financial injection with the obligation of buying Federal Housing Administration (FHA) insurance. So much so, it basically held a second mortgage monopoly for over 30 years.
But with the economy re-established, The Federal National Mortgage Association has been through a lot of changes. It became a mixed-ownership corporation in the 1950s and eventually turned into a government-sponsored, publicly traded and privately held corporation spawning Ginnie Mae (Government National Mortgage Association) and the privately held corporation that kept the “Fannie Mae” name without the “Federal National Mortgage Association”.
Yes, it’s like a family, right? You have Fannie Mae, younger sister Ginnie Mae and love interest on that love-hate relationship Freddie Mac. The name of this sitcom? “The Mortgages”?
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Popular Mortgage Terms
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Inserting provisions into a loan contract that severely disadvantage the borrower, without the borrowers knowledge, and sometimes despite oral assurances to the contrary. Prepayment ...
Total costs charged to the borrower that must be paid at closing, by the borrower, the home seller, or the lender. In dealing directly with a lender, settlement costs can be divided into ...
A charge imposed by the lender if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment or a specified number of ...
Same as term Negative Points: Points paid by a lender for a loan with a rate above the rate on a zero point loan. For example, a lender might quote the following prices: 8%/0 points, ...
A payment made by the borrower over and above the scheduled mortgage payment. If the additional payment pays off the entire balance it is a prepayment in full; otherwise, it is a partial ...
The period over which the borrower is obliged to make payments. On most mortgages, the payment period is a month but on some it is biweekly. It is not necessarily the same as the Interest ...
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