Check Your Understanding-Answers
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What is the role of the Fed?
To stabilize the economy through the judicious handling of the money supply and credit available in the US.
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Explain the difference between the primary and secondary mortgage markets.
The primary market lends money directly.
The secondary market buys, sells and trades loans.
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Differentiate between mortgage brokers and mortgage bankers.
Mortgage bankers originate loans.
Mortgage brokers act as middlemen to bring borrowers and lenders together.
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What do Fannie Mae and Ginnie Mae do that Freddie Mac does not?
Guarantee payment of mortgages.
