To increase the liquidity for the home mortgage market, Fannie Mae and Freddie Mac purchased home mortgages from banks and other lenders. They combined the mortgages into diversified portfolios of loans and issued

Question

Quizplus · Accepted Answer

Fannie Mae and Freddie Mac increase liquidity in the home mortgage market by purchasing home mortgages and then issuing mortgage-backed securities (MBS). These securities are backed by the mortgages they have purchased, allowing investors to invest in the housing market indirectly.

To Increase the Liquidity for the Home Mortgage Market, Fannie