Question:
“I hear all this talk about Fannie Mae. What is Fannie Mae exactly?”
Answer:
Fannie Mae or FNMA, stands for the Federal National Mortgage Association.
It’s a major market for buying and selling home loans and they have certain critical guidelines. If a loan doesn’t meet FNMA guidelines, it’s harder to sell, which typically results in a higher interest rate.
It was a privately-held corporation, but backed by the full faith of the U.S. government. Due to the mortgage crisis a few years back and all the related losses by “Fannie,” it was taken over by the federal government, causing taxpayers hundreds of billions of dollars in losses.
