Friday, August 8, 2014

What is Fannie Mae?

Ever wonder what Fannie Mae does?  Here's what you need to know.

Fannie Mae is the Federal National Mortgage Association, and its main function is to help get money into the hands of people who want to buy a house.  They do it like this: 
  • A lender sells a loan to a consumer.
  • The lender closes the loan, and then sells the loan to Fannie Mae.
  • Fannie Mae packages many mortgages together, and securitizes them, which means they issue bonds that are backed by the mortgages.
  • Large investors (primarily foreign governments) buy the bonds from Fannie Mae.
  • Fannie Mae then has more money to buy more loans from lenders, and the lenders don't run out of money to lend to people who want to buy houses.
Fannie Mae has to make sure that people pay the loans back after they buy a house, so Fannie Mae has rules that lenders have to follow if they want to sell their loans to Fannie Mae. These are called underwriting guidelines, and they are the rules that say what credit score you need, how much you need to earn, how much money you need to have in the bank, etc. if you want to get a mortgage.

Another company that does the same thing as Fannie Mae is Freddie Mac (the Federal Home Loan Mortgage Corporation).

Fannie Mae and Freddie Mac are the two companies that get most of the mortgage money in the United States out of the hands of wealthy investors and into the hands of people who want to buy houses.

Did you know that we sell our loans directly to Fannie Mae and Freddie Mac?  That means we can get our loans approved without the additional underwriting requirements that most lenders have.  If we give you a pre-approval, it's going to close.

Have questions about anything related to a mortgage?  Give us a call and see why they call us The Mortgage Experts.  

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!  

Make sure you check out our web site:

By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

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