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Financial Friday: Mortgage Loan Companies

When choosing a company to take out a mortgage loan from, there are countless factors to consider. Today we delve into two of the most popular mortgage loan companies and the different things they have to offer. 

Fannie Mae and Freddie Mac are two of the most popular mortgage loan companies in all of the United States. Both are public government sponsored enterprises that can be invested in. Fannie Mae, also known as The Federal National Mortgage Association, was founded in 1938 by Franklin D. Roosevelt himself. It was founded during the Great Depression and was a part of Roosevelt’s “New Deal” reform plan. Today, it’s headquarters are located in the nation’s capital of Washington D.C. and assists an innumerable amount of people with its mission and policies. Fannie Mae’s main objective is to secure mortgages in the form of mortgage backed securities which will in turn expand the secondary mortgage market. This allows lenders to reinvest assets into more lending scenarios so that the number of lenders in the market would increase. This trend would cause a decease in reliance of small savings and loan associations that may be local.

Freddie Mac is known as the brother association to Fannie Mae, and is properly known as The Federal Home Loan Mortgage Corporation. It was created in 1970 and it’s headquarters are currently located in Fairfax County, Va. It is known as a brother company to Fannie Mae because it supports the secondary mortgage market and really assists it’s sister corporation. The company buys mortgages on the secondary markets, proceeds to pool them, and then sells them as mortgage-based security to investors. This system helps circulate money through the market and make more money available for lending and therefore more money available to buy a home. Freddie Mac also offers debt securities and has plenty of resources for both sellers and servicers of all types.

Dealing with these two large corporations is comparable to the never ending fight between cell phone provides AT&T and Verizon Wireless. Each has their own list of positives and negatives, but no decisions should be made before speaking with an expert or someone who is familiar with how you want to approach these things. It is important to understand all aspects of these companies and not to settle for less than anything you are wishing for. In the end, the main objective of these companies is to spark a decent amount of change and positive increase in the housing market. This can help you in more ways than one whether you are buying or selling a home. It also effects renters and anyone else involved in real estate because it is such a large portion of the market,

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