Fannie Mae and Freddie Mac's rapid increase in the percentage of all mortgages held encouraged mortgage lenders to
A) tighten credit standards and decrease the number of sub-prime loans extended to borrowers.
B) offer lower rates than what Fannie Mae and Freddie Mac could offer.
C) lower credit standards and offer terms acceptable to Fannie Mae and Freddie Mac.
D) scrutinize the credit-worthiness of borrowers and require higher down payments on mortgages.

Question

Quizplus · Accepted Answer

Fannie Mae and Freddie Mac's increased involvement in the mortgage market led lenders to lower credit standards to align with the terms that these entities would accept, facilitating the extension of more loans that could be sold to them.

Fannie Mae and Freddie Mac's Rapid Increase in the Percentage