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”?
Real Estate Tips:
Find a local real estate agent to advise you on the best type of mortgage to your specific home.
Popular Mortgage Terms
To define a home equity line of credit, we can also take a look at how credit cards work. Similarly to credit cards, home equity lines of credit are sources of funds that can be accessed ...
The sum of all interest payments to date or over the life of the loan. This is an incomplete measure of the cost of credit to the borrower because it does not include upfront cash ...
The provision of the U.S. tax code that allows homeowners to deduct mortgage interest payments from income before computing taxes. Points and origination fees are also deductible, but not ...
Often referred to as a “second mortgage”, a home equity loan is a type of loan where the borrower disposes to the lender its equity to the home as collateral. To ...
Same as term Interest Rate: The rate charged the borrower each period for the loan of money, by custom quoted on an annual basis. A mortgage interest rate is a rate on a loan secured by a ...
A borrower with the best credit rating, deserving of the lowest prices that lenders offer. ...
A mortgage on which half the monthly payment is paid twice a month. It should be called a 'semi-monthly mortgage' but market practice often trumps logic. In contrast to a biweekly, a ...
A document that evidences a debt and a promise to repay. A mortgage loan transaction always includes a note evidencing the debt, and a mortgage evidencing the lien on the property. ...
Inserting provisions into a loan contract that severely disadvantage the borrower, without the borrowers knowledge, and sometimes despite oral assurances to the contrary. Prepayment ...
Have a question or comment?
We're here to help.