Heavily involved is residential mortgage lending

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Commercial banks have also become more heavily involved is residential mortgage lending. How have agencies set up by the federal government in the U.S. like “Ginnie Mae,” “Fannie Mae,” and “Freddie Mac” tried to support residential mortgage lending by creating “pass-through securities”? What problems facing these securities led them to create “collateralized mortgage obligations”? On the role that the government-sponsored entities play in housing finance, you need to talk about prepayment risk and how CMOs attempt to deal with this.

Reference no: EM131983226

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