Unit 2: Secondary Mortgage Market Players

Ginnie Mae

Guarantees MBSs that contain loans insured or guaranteed by a U.S. government agency

What's a participation certificate?

A mortgage-backed security issued by Freddie Mac

Regional State Bank has made a lot of loans to consumers in the community and is running low on funds. It seeks a loan from the Federal Home Loan Bank. This loan is called a(n) ______.

Advance

Federal Home Loan Bank (FHLB)

Advances (or loans) its member banks money in exchange for collateral (usually mortgages)

Regional State Bank is a member bank of the Federal Home Loan Bank. In exchange for mortgage collateral, Regional State Bank received a loan from the FHLB so it can make additional loans to consumers. What is the loan called that Regional State Bank received?

An advance

Fannie Mae

Can purchase any type of loan, but primarily deals with conventional loans from commercial banks

Freddie Mac

Can purchase any type of loan, but primarily deals with conventional loans from thrifts

Conventional loans from large commercial banks are the primary target for which secondary market player?

Fannie Mae

Credit flows to rural communities largely through the actions of ______.

Farmer Mac

The Federal Agricultural Mortgage Company (FAMC), created in the late 1980s, is more commonly known as ______.

Farmer Mac

Federal Home Loan Bank is regulated by what agency?

Federal Housing Finance Agency

Freddie Mac's mission is to provide ______, stability, and affordability in the U.S. housing market.

Liquidity

Which of the following loan types can be packaged into a mortgage-backed security eligible for guarantee by Ginnie Mae?

Loans insured or guaranteed by U.S. government agencies

A ______ is a mortgage-backed security issued by Freddie Mac.

Participation certificate

Farmer Mac

Purchases agricultural loans and loans from rural lenders