Unformatted text preview: son 9: Origination and Sec. Markets SECONDARY MORTGAGE MARKET
16 Components of Process
Originator Make the Actual Loan (Primary Mrkt) Banks v. Mortgage Bankers v. Mortgage Brokers Collecting of Payments & Escrow from Borrower Processing in case of Foreclosure Bundling or Securitization of Multiple Loans Possibly Provide Insurance against Losses Invest in Cash Flows from Large Pools of Mortgages Purchase Either "Stock" or "Bonds" Backed by Loans Servicer of the Loan Conduit Source of Funds/Capital Secondary Mortgage Markets
17 Hold in Portfolio Hold in Portfolio Investor Loan Originated Pool into Mortgage Backed Stock Insurance Sell to Investor Sell Loan Secondary Market Conduit Issue Bonds Backed by Loans Servicing Sell to Investor 2o MARKET CONDUITS
18 Create Pools of Loans and Issue MBS
Typically Include a Degree of Credit Enhancement Government Sponsored Enterprises (GSEs)
Fannie Mae (FNMA) Freddie Mac (FHLMC) Federal Home Loan Banks (FHLBs) Ginnie Mae (GNMA) is NOT considered a GSE Wall Street / Private Label
Bear Stearns, Lehman Bros, Merrill Lynch, etc. Primarily Purchased Non Conforming Loans Texas Tech University 6 Real Estate Fundamentals Dr. Eriksen Lesson 9: Origination and Sec. Markets HISTORY OF GSEs
19 Fannie Mae (FNMA) Establishe...
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This document was uploaded on 03/13/2014 for the course FIN 3332 at Texas Tech.
- Fall '08