Commonly known as Fannie Mae, FNMA is a government-sponsored enterprise that expands the secondary mortgage market by securitizing mortgage loans, thus providing lenders with liquidity and facilitating homeownership in the United States.
Freddie Mac (Federal Home Loan Mortgage Corporation) is a government-sponsored enterprise (GSE) that buys and securitizes mortgages to ensure a reliable and affordable supply of mortgage funds across the country.
A Mortgage-Backed Security (MBS) is a type of asset-backed security that represents a claim on the cash flows from mortgage loans, primarily on residential property. These securities are created by pooling together various mortgage loans and then selling the subsequent payment streams to investors.
Securitization is the process of pooling various types of debt—including mortgages, car loans, or credit card debt—into packaged securities that can be sold to investors.
The Shadow Banking System refers to the network of financial intermediaries that operate outside the traditional banking system and its regulatory framework.
