Top Mortgage Lenders

The top mortgage lenders in the United States are Fannie Mae and Freddie Mac. These two entities underwrite more residential mortgages than any other lender in the United States.

Many people think that these lenders are government agencies when they are not. In reality Fannie Mae and Freddie Mac are chartered corporations. That is they are special companies set up by Congress to make federal money available for mortgages issued by private banks and mortgage lenders. Others create the mortgages and market them, Freddie and Fannie finance them.

The idea behind Freddie Mac and Fannie Mae is to encourage home ownership by making mortgages available to as many people as possible. The United States has long had a government policy of encouraging homeownership which is seen as beneficial to society and the economy.

Freddie Mac

The Federal Home Loan Mortgage Corporation popularly known as Freddie Mac was created by Congress in 1970 to expand the secondary market for mortgages. Freddie Mac buys mortgages issued by other lenders and finances these mortgages with the sale of mortgage backed securities.

Freddie Mac doesn’t sell mortgages directly to the public it buys mortgages created by other lenders. You can find out if your mortgage is backed by Freddie Mac by going to Freddie Mac’s website. Freddie Mac also has programs available for the refinance of subprime mortgages.

Freddie Mac and Fannie Mae were both put under receivership by the federal government in 2008 because they had backed too many risky subprime mortgages.

Fannie Mae

Fannie Mae is the popular nickname for the Federal National Mortgage Association. This corporation makes sure that banks and other lenders have enough funds so they can issue mortgages to the public. Fannie Mae is a publicly traded corporation that issues stock but is charted by Congress.

Fannie Mae was set up as a government agency during the Great Depression to make sure that mortgages would be available to average people. It was converted into a corporation in 1968 to give it more power to carry out this mission.

Like Freddie Mac, Fannie Mae has been placed under receivership by the federal government. This move was taken to keep the corporation from going out of business.

Purpose of Fannie Mae and Freddie Mac

The purpose of the top mortgage lenders is to make mortgages and home ownership available to all Americans including the poor and minorities. To facilitate this these corporations make money available to banks to loan.

To find a lender that works with these top mortgage lenders you should check Fannie Mae and Freddie Mac’s website. Freddie Mac and Fannie Mae also have a wide variety of programs to help low income people refinance subprime mortgages available.