Fannie Mae

Subprime mortgage lending is the origination of residential mortgage loans to customers with impaired credit histories. Typically, these borrowers have lower credit scores and/or other credit deficiencies that prevent them from qualifying for prime mortgages. Subprime borrowers pay premium above the prime market rate in order to compensate the lender for bearing greater default risk. In addition, subprime borrowers pay higher origination and continuous costs, such as applications fees, appraisal fees, mortgage insurance payments, late fees and fines for delinquent payments.

Subprime lending became prevalent in the early 2000’s when property values were sky-rocketing and many Americans thought they would fulfill their home ownership dreams, by obtaining loans they may not otherwise qualify for. A subprime loan is a loan offered to an individual who does not qualify for a loan at the prime rate due to their credit history. Subprime loans have higher interest rates because of the risk that the lender is taking. During the early 2000’s the housing market was great for homebuyers, since interest rates where low and property values

In the new system, Fannie Mae has also allowed buyers to mortgage homes for 3 percent down, if the buyer has good credit and does not have enough money to close the deal.

Ginnie Mae, Frannie Mae, and Freddie Mac were U.S. government agencies that guaranteed various types of mortgage loans. They allowed mortgage lenders to obtain a better price for their mortgage loans in the securities market. Lenders used the proceeds to make new mortgage loans available.

Even though credit unions are like banks, Municipal Credit Union provides a safe place to save and borrow money at reasonable rates. Credit Union members are considered as owners regardless of how much money they have on deposit and will always have a vote in electing board members, unlike commercial banks. They also operate to promote the wellbeing of their members. For example, profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates, and lower loan rates. In conclusion, many of the financial institutions today such as commercial banks and credit unions offer many of the same types of services and

The Federal National Mortgage Association, referred to as “Fannie Mae”, was founded as a government sponsored entity

The Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) were to central semi-public organizations that assisted buyers with qualifying for mortgages. The both the company failed during the year 2008 when they were left with no money and were bankrupt. Like every company they were unable to pay back the money and they were in the looking for the help of government via taxpayer’s money. Hence, after the bankruptcy of 2008, the government has utilized huge amount of the taxpayer’s money for not letting them to shutdown and recovering them.

Real estate finance in the modern community is changing the perspective of modern lending and purchases. It is a means to contemporary community’s ability to develop a foundation for discussing the nature and means of public spending and purchase. As a self-government sponsored agency, Federal National Mortgage Association (FNMA) also known as Fannie Mae works with the ultimate responsibility of lending and buying secondary mortgages in the market (Oesterle, 2010). It helps in the conservation of interest rates in the real estate business in the contemporary community. There is also the need for focusing on the impacts of the Fannie Mae on real estate finance. The approach of the Fannie Mae helps lenders to use the money gained from the secondary

"The Wall Street Journal" found that the current bond yields were 0.20. These bonds are issued by the US government. In view of the fact that Fannie Mae Securities is a mortgage-backed securities issued by FNMA. We have observed that Fannie Mae and Treasury yields are somewhat different because FNMA Personal Securities and Treasury bonds are issued by the US government. Therefore, we note that there should be some difference between the two rates. As a result, Fannie Mae gets money from investors and financial institutions and sells their mortgages.

When making a subprime loan it is the responsibility of the lender to discern whether the loan is a good risk for the borrower and the lender. If the loan is going to be a poor risk to the borrower

Credit unions are institutions that don't make a profit. They use a money cooperative to lend money to its members, which can influence the rates that the person will pay to borrow money. They often don't require a minimum credit score and don't have strict income requirements. The credit union will glance at the potential borrower's income and apply a ratio based on the amount they owe to others. Credit unions allow borrowers to take out small loans, which are as little as $500.

Subprime lenders are lenders who, for a price, are willing to assume a higher risk than conventional lenders to purchase or refinance homes (Setzer, 2004).

-Credit unions are nonprofit, member-owned institutions. The lesson said like banks, they are able to provide loans through deposits to checking and saving accounts

One of the main problems that Fannie Mae faced during the financial crisis was the dramatic drop of their stock prices. An article published by CNN during the financial crisis said, “Shares of mortgage financing giants Fannie Mae and Freddie Mac both plummeted Monday after an analyst with Lehman Brothers wrote in a report that the two companies may need to raise billions of dollars if accounting rules are changed” (www.money.cnn.com). In 2007, Fannie Mae’s stock prices were at the lowest level they had seen in

FannieMae is a company that makes capital by lending money to people who need mortgages and by borrowing money at low interest rates. FannieMae is able to make money in any kind of economy. During times of low interest rates they make money on people who bought fixed rate mortgages at a time of high interest rates. They also have a hard making money during this time because their marginal percentage is smaller and they make less of a profit. During times of high interest rates, they lose money on people who bought fixed rate mortgages at low interest rates. They also make a lot of assets during this time because they borrow from the federal reserve or banks at lower interest rates and lend