Question

In the late 1960s, Congress created a number of agencies designed to address a struggling secondary market for residential mortgages.

Which of the following organizations was developed primarily to guarantee mortgage-backed securities based on pools of FHA, VA, and Rural Housing Service loans, rather than issue, buy, or sell mortgages?

A. Federal National Mortgage Association (Fannie Mae)
B. Government National Mortgage Association (Ginnie Mae)
C. Federal Home Loan Mortgage Corporation (Freddie Mac)
D. Federal Agricultural Mortgage Corporation (Farmer Mac)

Answer 1

B) Government National Mortgage Association (Ginnie Mae)

Step-by-step explanation:

The Government National Mortgage Association (Ginnie Mae) is part of the US Department of Housing and Urban Development (HUD). This means that it is 100% owned by the federal government. It was established in 1968 to promote home ownership specially to first time or low income home owners.

It works by backing or guaranteeing qualified loans and in case the borrowers fail to meet their timely payments, Ginnie Mae pays the principal and interest on their mortgage loans.