real estate finance - full book (500 pgs)

It was called a passthrough security because the

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Unformatted text preview: in a given market by acquiring or disposing of land or buildings. THE FEDERAL LAND BANK AND THE FARMERS HOME ADMINISTRATION These are both active in the financing of farms, farmland, and rural housing. FEDERAL MORTGAGE FINANCE SYSTEM There are three agencies play an important role in the secondary market, they are the Government National Mortgage Association (GNMA), the Federal Home loan Mortgage Corporation (FHLMC), and the Federal National Mortgage Association (FNMA). The GNMA is a government agency; the FHLMC is a quasi–government agency; and the FNMA is a former government agency that became a private corporation in 1968. The function of these agencies is to support the secondary market (secondary market will be discussed in Chapter 7) through the purchase of loans or the guarantee of mortgage–backed securities issued by lenders. These agencies, along with other minor players such as the Federal Agricultural Mortgage Corporation, or Farmer Mac, and the Student loan Marketing Association, or Sallie Mae, are collectively known as government–sponsored enterprises. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) The Government National Mortgage Association, commonly called Ginnie Mae (GNMA) is a government-owned corporation created by the Department of Housing and Urban Development Act of 1968. GNMA is the government agency, which participates directly in mortgage finance, as a guarantor of pool securities, and through management of loans under special subsidy program and the tandem plan. Dynasty School (www.dynastySchool.com) 5-13 REAL ESTATE FINANCE Its basic mission was to create and operate a mortgage–backed security program for FHA and DVA mortgages. It took over duties formerly performed by FNMA, after FNMA was given private status. PASS–THROUGH SECURITY In 1970 Ginnie Mae issued the first security backed by a pool of FHA and DVA mortgages. It was called a pass–through security because the monthly principal and interest payments collected from the borrowers were passed through to the investor. Ginnie Mae does not pu...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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