Well, Fannie, Freddie and Genie aren’t people, they are institutions. They are the beneath names for Fannie Mae (FNMA-Federal National Mortgage Association), Freddie Mac (FHLMC -Federal Home Accommodation Mortgage Corporation) and Genie Mae (GNMA-Government National Mortgage Association). They are the big three, and they buy the majority of mortgages for all homes beyond the nation.
In the old days, if you capital to buy a house, you met with a bounded broker who went to top academy with your Daddy, and he adjourned whether you were account the accident to accommodate you the money. His accommodation was apparently based on his claimed appraisal and some coffer guidelines.
These days, you can allocution to about any mortgage lender, they verify your activity history and you discover yourself owning a home. But you rarely accomplish your mortgage transaction to that aboriginal lender afterwards an acting period. That’s because lenders accomplish a lot of their money by affairs your loan. And better generally than not, whatever aggregation you accomplish your transaction to do own your loan. It is the “servicer” of that loan. It is alleged your servicer because it is artlessly application your accommodation for the academy that in fact owns it.
What happens is your accommodation gets awash to addition aggregation that sells it to one of the big three, or sometimes the aggregation you got your accommodation from originally sells it anon to one of the big three. Freddie, Fannie and Genie buy “pools” of loans. Loans bound become “pooled” into groups of loans of agnate size, importance amount and type. The servicer gets an account fee from the academy for application your accommodation and processing your payments. This fee is baby (about 3/8 of a percent), but if your basin gets big enough, it can actualize a tidy sum of assets as awash to Fannie, Freddie or Genie. There are companies that account billions of dollars of loans. You ability accept heard afresh in the account that some of these application portfolios didn’t perform. That’s created a little bit of a cephalalgia afresh in the mortgage world.
The absolute arrangement of mortgages (originators, brokers, banks) is advised to actualize these pools because so abundant assets can be generated from servicing. As abundant loans are fabricated to actualize a pool, the aggregation sells the loans to Freddie, Fannie or Genie, breeding better income. This activity in about-face allows the aggregation to accomplish better loans, and so on and so forth. The accomplished action begins again.
Freddie, Fannie and Genie set underwriting guidelines for lenders to pursue that will acquiesce for lower accident loans. The foreclosures of backward accept acquired these guidelines to become lower lenient, and in general, better affidavit is appropriate to abutting a loan. The loans in the pools serviced accept been advised to accomplish abiding they are adjustable with the guidelines set forth.
So, now you recognize who Freddie, Fannie and Genie are. Mystery solved.
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