Fannie Mae and Freddie Mac
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Government-Sponsored Enterprises: The Relatives

Fannie Mae and Freddie Mac are the two government-sponsored enterprises (GSE) in a specific area of mortgage lending. The goal of these private companies is to help expand home ownership across the country. In our continuing series, we've looked at these two companies, their operations, scandals, and status.

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But there are more branches in the family tree. In this article we take a look at other government-sponsored enterprises (GSEs), the cousins of Fannie Mae and Freddie Mac.

Ginnie Mae

The Government National Mortgage Association (GNMA, or Ginnie Mae) is another U.S. government-owned corporation within the Department of Housing and Urban Development (HUD). It was formed in 1968 as part of the federal act that made Fannie Mae a private corporation. Ginnie Mae works within the secondary mortgage market like Fannie Mae and Freddie Mac, selling loans to provide more mortgage funds, more liquidity, and increased stability.

Unlike its big siblings, however, Ginnie Mae provides mortgage-backed securities that are guaranteed by the government.

The most common misconception of mortgage products and investments offered by the main GSEs is the belief that the government backs all transactions. While the government did help form these organizations, provide them a public mandate, and offer special mortgage benefits, they are not actually guaranteed. Ginnie Mae securities are, backed by federally insured or guaranteed loans issued by the Federal Housing Administration, Department of Veterans Affairs, Rural Housing Service, and Office of Public and Indian Housing.

Ginnie Mae offers several types of mortgage-backed securities. Ginnie Mae serves a significant role in increasing homeownership, particularly with lower-income borrowers, driving mortgage rates down due to increased lender funds and competition, and offering lenders greater incentive to loan to populations they may not have considered before.  Investors particularly like Ginnie Mae, as all bonds are backed from the "full faith and credit" of the U.S. government and receive higher returns than other bonds.

Ginnie Mae's 2003 annual report noted that over its history the organization had guaranteed securities on the mortgages for over 30 million homes totalling over $2 trillion.

 

Sallie Mae

The SLM Corporation (Sallie Mae) is the largest college student loan company in the U.S. The company primarily provides federally guaranteed student loans through the Federal Family Education Loan Program, and offers financial aid resources for all involved in the college payment process.

Sallie Mae is included in the GSE family because it was formed in 1972 as such. As of 2004, the company is completely private and without government charter, meaning all government ties have been severed. The company's loans are still federally insured, and they have expanded its products to debt management services and business and technical support for colleges, universities and loan guarantors. In April of 2007, news broke that Sallie Mae was bought. When the deal is complete, the company will be owned by J.C. Flowers investor group, Friedman Fleishcher and Low private-equity firm, Bank of America and JP Morgan Chase.

 

Follow the link to continue reading this article.

Government-Sponsored Enterprises: Fannie Mae and Freddie Mac Today, Part 1

Government-Sponsored Enterprises: Fannie Mae and Freddie Mac Today, Part 2

Fannie Mae's Work to House America

Freddie Mac and Scandal

Fannie Mae & Jumbo Mortgage Rates

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Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state

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