Many would credit Fannie Mae with allowing more Americans
to own homes today than at any other time in history. Since Fannie
Mae began in 1968 they have helped more than 63 million families
achieve the American dream of homeownership.
What Fannie Mae Does
It is important to note that Fannie Mae is NOT a lender,
but a privately owned company that works to make sure lenders don't
run out of money. In addition to helping to regulate the industry
by providing a universal set of underwriting guidelines to all Fannie
Mae-approved lenders, they also created Desktop Originator/Desktop
Underwriter, a software program used by loan originators and lenders
to automate the underwriting process by assessing perceived risk.
Consumer awareness is another core aspect of Fannie
Mae's missions, which has led to the publication of their series
of books at homebuyingguide.org, as well as older programs, like
Community HomeBuyers which used to give borrowers more flexibility
in their debt ratios if they sat through a general information class
about the mortgage process, the theory being that an educated borrower
is less of a risk.
Saving Money with Fannie Mae
Other aspects of Fannie Mae's work include actively trying to help
consumers save money, either by reducing the requirements for down
payments, or by helping lenders to offer more competitive rates.
As an example, an article from their website, says, “This
week, the amount you would save buying a home that has a 30-year
mortgage financed by Fannie Mae compared to a home financed in the
jumbo market, will likely be around $22,700. That's real savings
-- and more homeowners.”
But Fannie Mae does more than just educate consumers. They are also
a driving force behind the concept of responsible lending, even
offering an eight-point plan that includes items such as issuing
business guidelines to avoid purchasing loans with abusive features,
expanding the application of conventional conforming practices to
the sub-prime market, and creating a mortgage consumer's bill of
rights, all of which are designed to assist lenders and consumers,
and to help everyone finance their version of the American Dream.
Fannie Mae lends throughout the United States, and
is subject to the laws of individual states.
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