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
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 ...
Advice on where to go to get a mortgage. A borrower can always select a loan provider by throwing a dart at the Yellow Pages. A referral is of value if it raises the probability of a ...
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 specific property. ...
A payment made by a lender to a mortgage broker for delivering an above-par loan. A par loan is one on which the lender charges zero points. Lenders charge points on loans carrying ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
The period used to calculate the monthly mortgage payment. The term is usually but not always the same as the maturity, which is the period over which the loan balance must be paid in ...
The interest rate used to calculate the mortgage payment. The interest rate and the payment rate are often the same, but they need not be. They must be the same if the payment is fully ...
Inserting provisions into a loan contract that severely disadvantage the borrower, without the borrowers knowledge, and sometimes despite oral assurances to the contrary. Prepayment ...
A second mortgage offered at preferential (subsidized) terms to those who qualify. For example, a labor union may offer members who are first-time home buyers a silent second to finance ...
Have a question or comment?
We're here to help.