What is the primary source of funding for GSE operations in purchasing mortgages?
Correct Answer
B) Issuing debt securities and mortgage-backed securities
GSEs primarily fund their operations by issuing debt securities in the capital markets and creating mortgage-backed securities from the loans they purchase. This allows them to raise capital to continue purchasing loans from lenders.
Why This Is the Correct Answer
GSEs primarily fund their operations by issuing debt securities in the capital markets and creating mortgage-backed securities from the loans they purchase. This allows them to raise capital to continue purchasing loans from lenders.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
People Also Study
Federal Mortgage-Related Laws
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A National Guard member has completed 6 years of service but has not been activated for federal duty. What is their VA loan eligibility status?
Next Question
A borrower provides an estimated property value of $450,000 on their application, but the property is currently under contract for $425,000. For TRID application purposes, which value should be used to determine if the application is complete?