Which GSE was created specifically to provide a secondary market for loans originated by savings and loan associations?
Correct Answer
C) Freddie Mac, to serve thrift institutions specifically
Freddie Mac was created in 1970 specifically to provide a secondary market for savings and loan associations (thrifts), while Fannie Mae primarily served banks and mortgage companies. This helped level the playing field in mortgage lending.
Why This Is the Correct Answer
Freddie Mac was created in 1970 specifically to provide a secondary market for savings and loan associations (thrifts), while Fannie Mae primarily served banks and mortgage companies. This helped level the playing field in mortgage lending.
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?
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