Which private organization specializes in buying and selling mortgages with private funds?

• A. Fannie Mae
• B. Ginnie Mae
• C. Freddie Mac
• D. Maggie Mae

Answer: (D)

The idea being tested is how the secondary mortgage market uses private funds to keep mortgages flowing. In this space, the private organizations that buy mortgages from lenders, then package and sell them as mortgage-backed securities, are the government-sponsored enterprises created to operate in private capital markets. The two main players that fit this description are Fannie Mae and Freddie Mac. They are private corporations chartered by Congress and funded with private capital, designed to expand liquidity in the mortgage market. Ginnie Mae, by contrast, is a government agency that guarantees securities backed by government-insured loans, not a private funder of mortgages. Maggie Mae isn’t a real organization. So the correct concept points to Freddie Mac (and Fannie Mae as well) as the private entities that specialize in buying and selling mortgages with private funds.