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What Is Fannie Mae?

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Fannie Mae plays a vital important role in the nation's housing finance system. Created by Congress it serves to provide liquidity, stability and affordability to the mortgage market. It provides liquidity to banks, and mortgage companies that make home purchase and refinance loans available to consumers.

In short, Fannie Mae buys mortgages from lenders and either holds these mortgages in their portfolios or packages the loans into mortgage-backed securities (MBS) which may be sold. Lenders who have sold mortgages to Fannie Mae are then able to use that cash to lend to additional consumers. Fannie Mae was created to ensure that consumers are able to get home loans when they need them. Conventional loans in Southern California which are backed by Fannie Mae, are available through Huntington Beach based Summit Lending.