When mortgage originators sell mortgages to Fannie Mae, Freddie Mac, and investment banks the originators have no
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When mortgage originators sell mortgages to Fannie Mae, Freddie Mac, and investment banks the originators have no additional liability for possible default by the borrower. How will this arrangement influence the incentive of the originators to scrutinize the creditworthiness of the borrower? Would the incentive structure be different if the originator planned to hold the mortgage until it was paid off? Why or why not?
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Related Book For
Macroeconomics Private And Public Choice
ISBN: 9780357134009
17th Edition
Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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