Fannie Mae

Fannie Mae (and a similar company, Freddie Mac) are wholesalers for the mortgage industry.  They borrow money from investors to buy mortgages from lenders. They also repackage mortgages into securities for sale to investors, adding their own guarantee that investors will receive the promised principal and interest. They charge lenders a fee for that service.

They have become two of the nation's largest financial institutions, with combined profits of $12.8 billion last year. Through their decisions as to what kinds of mortgages they will purchase or securitize, they exert enormous influence on the mortgage industry and the borrowing options available to consumers.

As their mortgage documents are so well known, we recommend you use the identical documents for mortgages you originate, see later.