FNMA and FHLMC- Federal National Mortgage Associations commonly known as Fannie Mae and Federal Home Loan Mortgage Corporation commonly known as Freddie Mac were founded in 1968, with the primary function to provide liquidity to the nation’s mortgage finance system through securitized mortgages in the Mortgage Backed Securities (MSB). Mortgage Backed Securities (MSB ) - It is a security created through securitization, whereby underlying assets imply loans which in turn are used by the firms and companies for investment in the housing sector. These mortgages are secured to the lender and backed by some form of homeowners’ insurance. This protects the mortgagee but not the owner of the MBS.

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Chapter 15, Problem 2FCT

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FNMA and FHLMC- Federal National Mortgage Associations commonly known as Fannie Mae and Federal Home Loan Mortgage Corporation commonly known as Freddie Mac were founded in 1968, with the primary function to provide liquidity to the nation’s mortgage finance system through securitized mortgages in the Mortgage Backed Securities (MSB).

Mortgage Backed Securities (MSB) - It is a security created through securitization, whereby underlying assets imply loans which in turn are used by the firms and companies for investment in the housing sector. These mortgages are secured to the lender and backed by some form of homeowners’ insurance. This protects the mortgagee but not the owner of the MBS.

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