The Difference Between Fannie Mae And Freddie Mac

fannie mae freddie mac

Understanding the difference between Freddie Mac and Fannie Mae is important for homeowners.

Just like with most home purchases, a mortgage is involved. In fact, unless you have the money upfront to purchase property you will need to borrow money from a lender who issues a mortgage on your property. However, there are other important players in the mortgage game such as Fannie Mae and Freddie Mac. Let us delve deeper into understanding who these entities are and why they are so important.

Who Is Fannie Mae?

Also known as the Federal National Mortgage Association, Fannie Mae plays a huge role in the mortgage industry. In fact, Fannie Mae is a government-sponsored mortgage association that is insured by the Federal Housing Administration (FHA). In addition, Fannie Mae was created before the creation of Freddie Mac. As a result, both Fannie and Freddie are fierce competitors in the mortgage industry. Fannie Mae plays a very important role within the mortgage industry. Fannie Mae will buy mortgages from lenders and then go on to sell them on the market. This is why the government is able to replenish the supply of money that can be lent out for new home purchases.

Who Is Freddie Mac?

Commonly referred to as the Federal Home Mortgage Loan Corporation (FHMLC), also known as Freddie Mac. Just like Fannie Mae, Freddie Mac is a government-sponsored home loan corporation. Created in 1970, Freddie Mac is used in expanding the secondary market of mortgages. Basically, Freddie Mac serves to buy mortgages from secondary markets and then pools them all. After all the secondary market mortgages are pooled together they are subsequently sold to various investors as mortgage-backed security. As a result, these secondary mortgages offer a market increase in the supply of money available to lend out for new home purchases.

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, LinkedIn, and Google+.

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