Which of the following is NOT considered a federally chartered secondary market?

Which of the following is NOT considered a federally chartered secondary market?

• A. Fannie Mae
• B. Freddie Mac
• C. Commercial savings banks
• D. Ginnie Mae

Answer: (C)

The correct response highlights that commercial savings banks are not classified as federally chartered secondary markets. Instead, Fannie Mae, Freddie Mac, and Ginnie Mae are all entities that participate in secondary mortgage markets. Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) are government-sponsored enterprises (GSEs) that buy loans from lenders, pool them, and then sell them as mortgage-backed securities to investors. They play a critical role in stabilizing the market by ensuring that sufficient funds are available for mortgages. Ginnie Mae (the Government National Mortgage Association) is also part of the federal secondary market, focusing on guaranteeing securities backed by federally insured or guaranteed loans, such as those from the FHA and VA. In contrast, commercial savings banks primarily serve as financial institutions where individuals and businesses can deposit money and obtain savings accounts, mortgage loans, and personal loans. They do not function as secondary market entities that trade securities backed by mortgage loans. Thus, identifying commercial savings banks as not fitting the description of federally chartered secondary markets clarifies the relationship and roles of these entities within the broader context of real estate finance.

The correct response highlights that commercial savings banks are not classified as federally chartered secondary markets. Instead, Fannie Mae, Freddie Mac, and Ginnie Mae are all entities that participate in secondary mortgage markets.

Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) are government-sponsored enterprises (GSEs) that buy loans from lenders, pool them, and then sell them as mortgage-backed securities to investors. They play a critical role in stabilizing the market by ensuring that sufficient funds are available for mortgages.

Ginnie Mae (the Government National Mortgage Association) is also part of the federal secondary market, focusing on guaranteeing securities backed by federally insured or guaranteed loans, such as those from the FHA and VA.

In contrast, commercial savings banks primarily serve as financial institutions where individuals and businesses can deposit money and obtain savings accounts, mortgage loans, and personal loans. They do not function as secondary market entities that trade securities backed by mortgage loans.

Thus, identifying commercial savings banks as not fitting the description of federally chartered secondary markets clarifies the relationship and roles of these entities within the broader context of real estate finance.