Which of the following is true about GNMA pass-throughs?
I.They separate individual home mortgages into heterogeneous pools.
II.The purchaser of a GNMA receives monthly interest and principal payments received from payments made on the pool.
III.The banks that originated the mortgages continue to service them.
IV.The banks that originated the mortgages maintain ownership of them.

Question

Quizplus · Accepted Answer

GNMA pass-throughs do not separate mortgages into heterogeneous pools (I is false). The purchaser of a GNMA receives monthly interest and principal payments from the pool (II is true). The banks that originated the mortgages continue to service them (III is true). The banks do not maintain ownership of the mortgages, as they are sold to investors through GNMA securities (IV is false). Therefore, choices II and III are true while I and IV are false. Choice B correctly reflects this.

Which of the Following Is True About GNMA Pass-Throughs