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January 25, 2006

The Subsidized Housing Market

Some notes on the secondary market for home mortgages.

Have you ever wondered what happens to your mortgage once it closes? Probably not, but the chances are that it ended up as a package with hundreds of other mortgages and sold as a security. What typically happens is the mortgage brokers sells the debt to a bank, who sells the debt to Freddie Mac or Fannie Mae, who packages mortgages together, guarantees that they will be paid as promised, and issues securities to investors with the big bag of mortgages as collateral. Which means that at the end of the day, the only ones that are holding any significant risk are Fannie and Freddie.

 

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The Subsidized Housing Market

Posted on January 25, 2006 08:44 AM by Mortga104.
Filed in Real Estate under mortgage brokers.
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