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