Fannie Mae – What It Is and How It Works

Fannie Mae pic

Fannie Mae
Image: investopedia.com

Led by President David Gomez and doing business as Priority Financial Group, Priority Mortgage Group stands out as an award-winning home lender. Under David Gomez’s direction, Priority Mortgage Group draws on the resources of government-sponsored enterprises to provide consumers with accessible loan products.

Fannie Mae, formally known as the Federal National Mortgage Association, is such a government-sponsored enterprise, or GSE. This means that Fannie Mae falls under the jurisdiction of the Federal Housing Finance Agency and that all of its profits go to the United States Treasury, which owns the entirety of its senior preferred stock.

Fannie Mae was founded in 1938 as a way of providing funding for affordable home loans. It continues to serve that purpose, in that it purchases mortgages from the originating lenders. This provides the lenders with money that they can use to fund additional loans, while simultaneously relieving the lenders of some of their existing risk.

Fannie Mae retains ownership of some of the loans that they purchase. It sells others as government securities, which investors trust, thanks largely to the federal backing of the entity.

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