| Government Sponsored Entities (GSE) |
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The two major Government Sponsored Entities (GSE) are Fannie Mae (FNMA) and Freddie Mac (FHLMC). These two federally chartered corporations purchase mortgages that conform to thier underwriting guidelines and then create and sell securities called Mortgage Backed Securities to investors in the financial markets. By securitizing mortgages in this way, the GSEs provide liquidity to mortgage lenders, making more funds available for mortgages at an overall lower cost. |
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