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Fannie Mae Loan Lookup Tool What is Fannie Mae and what do they do?
One of two things can happen when a borrower takes out a mortgage. The first thing is that the lender who issued the loan can hold onto the mortgage in what is called a mortgage portfolio. The lender may sell the servicing rights, but will still own the mortgage itself. In this case, it is said that the lender will hold the note.
More likely though, the original lender will sell the mortgage to Fannie Mae (or Freddie Mac), who will in turn sell it to investors. The process from beginning to end goes something like this:
Fannie and Freddie are what as known as Government Sponsored Entities, or GSEs. They work with both financial investors looking to buy large pools of mortgages, and lenders that are looking for investors to whom they can sell mortgages. These mortgages are the ones that they provide to their customers.
Basically, Fannie Mae and Freddie Mac take money from the investors. They then in turn and supply it to the lenders, who have customers that need mortgages.
Once the borrower closes on their mortgage, the loan is sold to Fannie Mae or Freddie Mac. That mortgage then gets packaged together with perhaps thousands of other mortgages into what is known as a Mortgage Backed Securities or MBS. The MBS are then sold to investors, which provides additional capital for making more loans and the cycle starts all over again.
Orange County Real Estate > About Short Sales > Fannie Mae Loan Lookup
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