1. Creating the Secondary Mortgage Market
Players and History
Brenda Buckman

2. Topics During Presentation
History
The Players
Secondary Mortgage Market Process
How It May Impact You

3. House Buying Back When…
Banks were “storage” for saved money
Was not a place to receive mortgage loans
The very rich built large apartment and housing complexes for people to live
Only 4/10 households owned their home
Mortgage loan terms:
Limited to 50 percent of the property's market value
Repayment schedule spread over three to five years
Ending with a balloon payment.

4. Federal Housing Administration
Created as part of the National Housing Act of 1934
Help get American “back on their feet”
The Great Depression
FDR
Unemployment
Post WW II
Suburbs
Jobs

5. The Major Players Charter:
Federal National Mortgage Association
Government National Mortgage Association
Federal Home Loan Mortgage Corporation
Charter:
To expand the secondary market for mortgages and mortgage backed securities by buying mortgages made by savings and loan associations and other depository institutions.

6. Conforming Loans Office of Federal Housing Enterprise Oversight
Sets criteria for conforming loan limits
Applicant's:
Debt to Income ratio
Income
Employment history
Net worth
Credit rating
Open credit lines

7. PMI Behind the Scenes Lenders (Banks)
Government Sponsored Entities or “Private Bonds”
Investors
PMI

8. How It May Impact You Underwriting Guidelines
Changes can affect your ability to obtain a loan
Guidelines are to create “conforming” loans
To sell in secondary market
Conforming loans are less likely to default
Paying PMI

9. Questions? Overview Why the Secondary Mortgage Market was created
The Major Players
Fannie Mae
Ginnie Mae
Freddie Mac
The process from you to the investor
How this “behind the scenes” market may impact you
Questions?

10. References
Fannie Mae. (2011). Retrieved from
Feddie Mac. (2011). Retrieved from hhttp://
Ginnie Mae. (2011). Retrieved from
Cornett, B. (2009, February 23). How does the secondary mortgage market work?. Retrieved from the-secondary-mortgage-market-work/
Oliver, M. (2009, February 23). How the secondary mortgage market works in the united states. Retrieved from secondary-mortgage-market-works-in-the-united-states/
Mortgage-backed securities. (2010, July 23). Retrieved from