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What is Ginnie Mae?

Ginnie Mae is the colloquial name for the Government National Mortgage Association, or GNMA. It brokers mortgage-backed securities which are backed by the full faith and credit of the US Government.

Among Ginnie Mae, Freddie Mac, and Fannie Mae, only Ginnie Mae is actually owned by the government and issues securities which are backed by the full faith and credit of the US Government. Ginnie Mae’s mission is to increase liquidity and decrease risk to mortgage lenders so that Americans are able to purchase homes.

It does so by purchasing debt from mortgage banks, pooling it, and selling mortgage-backed securities. Freddie Mac and Fannie Mae perform similar functions, and were created at the impetus of Congress, but they were fully independent entities until 2008, when the FHFA took them over using conservatorship privileges.

Bad debt distributed widely through mortgage-backed securities were a major reason for the Subprime Meltdown and Great Recession of 2007-2009.

Keywords: Freddie Mae, Fannie Mac, Ginnie Mae, Government National Mortgage Association (GNMA),
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