You’ve probably heard the names Fannie Mae and Freddie Mac before as they relate to the mortgage lending process, but who are they?
Actually, Fannie Mae and Freddie Mac aren’t people at all, but rather two government-sponsored enterprises that back mortgage loans across the country.
“Your mortgage payments go to the secondary private market investors who are backed by these enterprises.”
Other entities, like the Department of Veterans Affairs, handle non-conventional loans, but regardless of what loan program you pursue, you need to realize that you aren’t paying your mortgage to these entities directly.
Instead, your mortgage payments go to the secondary private market investors who are backed by these enterprises. With that said, though, these secondary investors still must meet the guidelines set by entities like Fannie Mae and Freddie Mac.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.