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Mortgage Aggregators Another key player in the secondary mortgage market involves issuers of mortgage-backed securities. These issuers include Wall Street firms as well as Freddie Mac, and Fannie Mae, the latter two of which are the largest mortgage associations in the US.
The purpose of GSEs buying mortgage loans in the secondary marketplace is to ensure liquidity for mortgage originators. This liquidity allows for lenders to continue providing borrowers with access to the loans they are seeking. GSEs dont lend money directly to the public.
Fannie Mae buys FHA, VA, and conventional loans and is the largest purchaser in the secondary market.
The Ginnie Mae II MBS also allows small issuers who do not meet the dollar requirements of the Ginnie Mae I MBS program to participate in the secondary mortgage market. In addition, the Ginnie Mae II MBS permits the securitization of adjustable rate mortgages (ARMs).
Ginnie Mae, or the Government National Mortgage Association, primarily insures mortgage-backed securities in the secondary mortgage market. This guarantees timely payments to investors in these securities, contributing to market stability. The correct answer option is 2) Insures mortgage-backed securities.
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In addition, Fannie Mae participates in the secondary market, buying and selling DUS MBS and enabling investors to create structured securities backed by DUS MBS.

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