A lender closes 40 loans in a quarter and sells 32 of them. The compliance analyst is asked which of the entities involved actually lends money to the borrower. Which of Fannie Mae, Freddie Mac, and Ginnie Mae directly originates a mortgage loan to this consumer?
Correct Answer
B) None of them: Fannie, Freddie and Ginnie do not lend to buyers
B. None of the three originates this consumer’s mortgage. Fannie Mae and Freddie Mac support lending through the secondary market rather than lending directly to this buyer. Ginnie Mae guarantees payments on eligible mortgage-backed securities; the participating lender originates the underlying loan. Scope and exceptions: Purchasing a loan, servicing it and guaranteeing securities are different functions. The count of loans sold does not identify a new originating lender. Source: What We Do — https://www.fanniemae.com/about-us/what-we-do About Us — https://www.freddiemac.com/about/sustainability Ginnie Mae 101: institutional roles — https://www.ginniemae.gov/issuers/issuer_training/Documents/course_1_ginnie_mae_101_transcript.pdf
Why This Is the Correct Answer
B. None of the three originates this consumer’s mortgage. Fannie Mae and Freddie Mac support lending through the secondary market rather than lending directly to this buyer. Ginnie Mae guarantees payments on eligible mortgage-backed securities; the participating lender originates the underlying loan. Scope and exceptions: Purchasing a loan, servicing it and guaranteeing securities are different functions. The count of loans sold does not identify a new originating lender.
Why the Other Options Are Wrong
Option A: Fannie Mae lends directly on loans within the conforming limit
Conforming eligibility does not turn Fannie Mae into the borrower’s originating lender.
Option C: All 3 lend, which is why they are called the secondary market
Secondary-market participation is not direct consumer origination.
Option D: Ginnie Mae lends directly where the loan is government-insured
Government loan insurance or guarantees do not make Ginnie Mae the originator.
Exam Tip
Distinguish who makes the loan from who buys it or guarantees its securities.
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