- It is a common misconception that Fannie Mae is an actual mortgage lender. Actually, it is a governmental agency that works closely with actual mortgage lenders and brokers to assist prospective homeowners in securing affordable mortgages. In this capacity, Fannie Mae actually invests in the mortgage market, which in turn gives lenders the funds required to underwrite the mortgages consumers are seeking.
- Mortgage lenders who accept Fannie Mae backing for their funding must agree to eschew predatory lending practices. This makes a Fannie Mae mortgage one that protects homeowners from unethical subprime lending practices. Fannie Mae lenders use the same lending practices for subprime mortgages as they would use for borrowers with stellar credit. In past years the abuse of the mortgage lending industry has led to the current financial and mortgage crisis, and even as Fannie Mae was partially implicated in this development, it is working hard to uphold its original mandate.
- Fannie Mae mortgages predominantly affect homeowners who looked to the subprime mortgage market for funding. This has put many borrowers in a position of not being able to afford the loan product they chose. Fannie Mae now works hard with lenders and borrowers to keep homeowners in their homes and mortgage loans from foreclosing. It offers access (a link is provided in the Resources section) to a number of government sponsored foreclosure prevention programs, such as HopeNOW and the Home Preservation Foundation, and also counsels borrowers about their rights.
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