No. of Recommendations: 3
That means that most "lenders" aren't really lending their own money, they're lending Fannie and Freddie's money.

After the loan is made, Fannie or Freddie may buy the mortgage from the lender. Together, the two companies buy one of every five U.S. mortgages from the origination lenders,

Ummmm...your article is showing it's age. Between late 2008 and 2012, the government (Fannie, Freddie, FHA, VA & USDA) backed more than 95% of mortgage loans, according to this article:

Exactly four years ago, during the early days of the financial crisis, the federal government took control of mortgage financiers Fannie Mae and Freddie Mac through a legal process called conservatorship. Since then, the two companies have required roughly $150 billion in taxpayer support to stay solvent, while the government has kept the housing market afloat by backing more than 95 percent of all home loans made in the United States.

That means, at most, 5% of loans are backed by private lenders.

Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.