Which of the following statements about mortgage markets is/are true?
I. Mortgage companies service more mortgages than they originate.
II. Servicing fees typically range from 2 percent to 4 percent.
III. Most mortgage sales are with recourse.
IV. The government is involved in the residential mortgage markets.

Question

Quizplus · Accepted Answer

I and IV are correct. Mortgage companies often service a large number of mortgages, which means they manage the loan's payment and administration, and the government plays a significant role in the residential mortgage markets through entities like FHA, VA, and Ginnie Mae. However, servicing fees are typically much lower than 2-4%, often around 0.25% to 0.5%, and most mortgage sales are without recourse, meaning the seller is not liable if the borrower defaults.

Which of the Following Statements About Mortgage Markets Is/are True