FNMA/FHLMC ________ loans

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Prepare for the NMLS Laws and Regulations Test with comprehensive flashcards and multiple-choice questions. Each question is crafted with hints and detailed explanations to aid understanding and help you excel in 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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