| In 1938, The Fannie Mae Corporation was established | | | | issued to investors. When Fannie Mae issues the MBS, |
| by the US Government to promote the growth of | | | | she is guaranteeing the investors a return on their |
| home ownership by providing a secondary mortgage | | | | investment, and at the same time, providing a source |
| market. What is a secondary mortgage market? Well, | | | | of funding for issuing further mortgages. This provides |
| the secondary mortgage market exists in the buying | | | | the nation’s lenders with a steady stream of |
| and selling of a mortgage from one lender to another. | | | | cash to continue to make mortgages available to the |
| The bank, or Mortgage Company that provided you | | | | consumer. |
| with your loan, can turn around and seek to sell your | | | | How does all this relate to the home of your dreams? |
| mortgage to a company such as Fannie Mae. This | | | | Well, stop just a moment to connect all the dots. |
| frees up their cash to make another mortgage loan. | | | | Fannie Mae buys mortgages from your local lender. |
| And the cycle of growth is expanded and sustained in | | | | The lender receives the proceeds from that purchase, |
| this manner. The idea and concept worked, and today, | | | | and can then offer a new mortgage to you. It’s |
| Fannie Mae has helped millions of Americans achieve | | | | a steady and continual circle of growth. Why? Well, |
| the dream of home ownership. Until recently, Fannie | | | | Fannie Mae isn’t the only lender in the |
| Mae was a part of the US Government, and was | | | | secondary mortgage market. Insurance companies, |
| overseen by the Housing and Urban Development | | | | pension funds, securities dealers, and other financial |
| branch of that government. Now, however, Fannie | | | | institutions buy mortgages on the secondary market. |
| Mae is a privately held, stock ownership company that | | | | Who invests in these insurance companies, pension |
| promotes the growth of the housing industry by | | | | funds and securities dealers? Where do they get their |
| making it possible for many low-to-middle income | | | | money? From taxpayers just like you. Mortgage |
| Americans to own homes. Investors just like you and I | | | | holders just like you. Now can you see how Fannie |
| can purchase stock in the Fannie Mae Corporation, | | | | Mae and other mortgage lenders in the secondary |
| and not only increase our won wealth, but also help to | | | | mortgage market, work to foster home ownership and |
| fund the home ownership possibilities for a new | | | | community growth, all in one process? |
| generation of Americans. | | | | The primary focus for Fannie Mae, operating under a |
| In 1968, just thirty years after her government | | | | government directive, is to provide the maximum |
| commissioned birth, Fannie Mae became a private | | | | amount of help to lenders in making mortgage loans to |
| company operating with private capital. She had | | | | the low, to middle, to moderate income families across |
| outgrown her need for federal funding and supervision. | | | | America. Fannie Mae is also involved in a nationwide |
| That does not mean, however, that the government | | | | effort to join with lenders and community partners to |
| does not still closely work with the Fannie Mae | | | | create even more home ownership possibilities. |
| Corporation. It does. The housing industry has | | | | Through this partnering, and the existence of FHA |
| continued to grow, and currently the entire mortgage | | | | backed mortgage loans, the Fannie Mae Corporation |
| market is experiencing phenomenal success. Fannie | | | | and your local lender can offer a greater variety of |
| Mae’s focus, however, is still on the low to | | | | loan products, and reach a much broader client base. |
| middle-income American. | | | | This increases once again, the homeownership |
| Fannie Mae deals only in the secondary mortgage | | | | possibility for many, more Americans. Thanks to the |
| market, this way the Fannie Mae Corporation can | | | | expanding mortgage product line, the increase in real |
| ensure that money for mortgages is available | | | | estate values, and the efforts of Fannie Mae, more |
| throughout the 50 states and that as many | | | | Americans own their own home than ever before. |
| homeowners as possible can take advantage of | | | | Where will the future take Fannie Mae, and |
| home ownership. | | | | corporations like her? I think the Fannie Mae |
| How does Fannie Mae continue to fund the mortgages | | | | Corporation will continue to foster growth and the |
| that she buys? Through the issuance of mortgage | | | | realization of the American Dream for many |
| backed securities. These securities known as MBS are | | | | successful years to come. |