This means that when borrowers become delinquent on loan obligations, Fannie and Freddie are responsible for the losses on the loans they guarantee, while Ginnie Mae issuers become financially responsible for the delinquent debt. Ginnie Mae is known as a guarantor for federally backed loans, while Fannie and Freddie guarantee loans themselves. Ginnie Mae is housed within the Department of Housing and Urban Development and provides guarantees to cover loses lenders would suffer through federally insured or guaranteed loans, should a residential homeowner default on their borrower obligations. Freddie Mac and Fannie Mae are publicly-traded corporations that securitize residential mortgages and sell them to investors as mortgage-backed securities.įreddie Mac and Fannie Mae are not government agencies, but Ginnie Mae is.
Freddie Mac and Fannie Mae are known as Government Sponsored Enterprises, private companies that are sponsored by the US Government.
