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Lenders can sell qualifying mortgages to the Federal agencies Fannie Mae and Freddie Mac to offload their interest rate risk. When a bank intends to sell the mo
by Bostonian 5y ago
Lenders can sell qualifying mortgages to the Federal agencies Fannie Mae and Freddie Mac to offload their interest rate risk. When a bank intends to sell the mortgages it grants, it may become careless about credit risk -- this lead to the 2008 financial crisis.
- sharemywin 5y agoFannie Mae was created in 1938 so there were other factors at play in the 2008 financial crisis. Mostly sub-prime mortgages. and lenders being able to "shop" for appraisals.
- Tycho 5y agoThis makes sense. Obvious now that I think about it.