FNMA/FHLMC ________ loans

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Prepare for the NMLS Laws and Regulations Test. Enhance your knowledge with flashcards and multiple-choice questions, each with explanations. Gear up to ace your exam!

Multiple Choice

FNMA/FHLMC ________ loans

Explanation:
FNMA and FHLMC operate in the secondary mortgage market by purchasing mortgages from lenders. This buys loans from originators, providing liquidity so lenders can make more loans. They do not insure or guarantee the individual loan itself, and they do not originate loans. After buying the loans, they pool them into mortgage-backed securities, which they guarantee to investors in terms of timely principal and interest payments. So the best fit is that they purchase loans.

FNMA and FHLMC operate in the secondary mortgage market by purchasing mortgages from lenders. This buys loans from originators, providing liquidity so lenders can make more loans. They do not insure or guarantee the individual loan itself, and they do not originate loans. After buying the loans, they pool them into mortgage-backed securities, which they guarantee to investors in terms of timely principal and interest payments. So the best fit is that they purchase loans.

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