Las Vegas Secondary Mortgage Market
Department of Housing and Urban Development
When a Las Vegas homeowner has defaulted
on his or her home loan and was foreclosed by the lender, the
lender collects losses from FHA which is a part of HUD. In turn,
HUD will obtain the deed to the property and offer it for sale
to the general public. In order to bid for a HUD home, contact
a Las Vegas real estate agent who will submit a bid on HUD's
contract and form. Property listings for HUD homes can be found
at www.hud.gov
The secondary mortgage market stimulates both the housing
construction market and the mortgage market by expanding the
types of loans available. Growth in the use of secondary markets
has greatly increased the standardization of loans.
When a loan is sold, the original lender may continue to collect
the payments from the borrower. The lender will then pass payments
to the investor who purchased the loan and the investors pay
a fee for servicing the loan.
Various agencies purchase a number of mortgage loans and assemble
them into packages called pools. The agencies purchase mortgages
from banks and savings associations; securities that represent
shares in these pooled mortgages are sold to investors or other
agencies.
Major Warehouse Agencies
FANNIE MAE
(Formerly the Federal National Mortgage Association or FNMA)
This is a quasi-governmental agency. It is a privately owned
corporation that issues its own common stock and provides a
secondary market for mortgage loans. FNMA deals with conventional,
FHA, and VA loans and purchases a pool (or block) of Las Vegas
mortgages from a lender in exchange for mortgage-backed securities.
The lender may keep the securities or sell them. http://www.fanniemae.com
GINNIE MAE
GNMA is a governmental agency under the division of the Department
of Housing and Urban Development (HUD) that is organized as
a corporation without capital stock. It has special-assistance
programs and works with FNMA in secondary market activities.
GNMA guarantees investment securities issued by private offerors;
these securities are backed by pools of FHA and VA mortgage
loans. Monthly pass-through of principal and interest payments
are provided directly to the certificate holder. http://www.ginniemae.gov
FREDDIE MAC
(Formerly the Federal Home Loan Mortgage Corporation)
FLMC provides a secondary market for Las Vegas mortgage loans,
but primarily conventional loans. Freddie Mac has the authority
to purchase mortgages, pool them and then sell bonds in the
open market with the mortgages as security. It does not guarantee
payment of Freddie Mac mortgages. http://www.ginniemae.gov
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