Question

If a lender has made loans that exceed the conforming loan limit, which secondary market would provide the BEST opportunity for the lender to sell the loans?

a) Fannie Mae
b) Freddie Mac
c) FHA
d) VA

Answer 1

Fannie Mae is the secondary market that provides the best opportunity for a lender to sell loans that exceed the conforming loan limit

Step-by-step explanation:

The secondary market that would provide the best opportunity for a lender to sell loans that exceed the conforming loan limit is Fannie Mae.

Fannie Mae is a government-sponsored enterprise that buys mortgages from lenders and then packages them into mortgage-backed securities to sell to investors. They have a higher loan limit compared to other secondary markets, allowing lenders to sell loans that exceed the conforming loan limit.

For example, if a lender has made loans that exceed the conforming loan limit of $548,250 in most areas, they can sell these loans to Fannie Mae instead of keeping them on their books.