Which of the following is NOT a participant in the secondary mortgage market?

Which of the following is NOT a participant in the secondary mortgage market?

• A. RESPA
• B. Fannie Mae
• C. Ginnie Mae
• D. FHLMC

Answer: (A)

The correct answer identifies RESPA as not being a participant in the secondary mortgage market. RESPA, which stands for the Real Estate Settlement Procedures Act, is a federal law that governs the processes involved in the closing of real estate transactions rather than functioning as a direct participant in the buying and selling of mortgage loans and securities. In contrast, Fannie Mae, Ginnie Mae, and FHLMC (Freddie Mac) are all key players in the secondary mortgage market. These entities help facilitate the flow of funds into the housing market by purchasing mortgages from lenders, thereby providing them with capital to issue new loans. Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs), which buy and securitize mortgage loans, while Ginnie Mae guarantees securities backed by federally insured or guaranteed loans. Their roles are crucial for maintaining liquidity in the mortgage market. Thus, RESPA is focused on consumer protection during real estate transactions, whereas the other choices are directly involved in the secondary mortgage market operations, underscoring why RESPA is the correct choice for this question.

The correct answer identifies RESPA as not being a participant in the secondary mortgage market. RESPA, which stands for the Real Estate Settlement Procedures Act, is a federal law that governs the processes involved in the closing of real estate transactions rather than functioning as a direct participant in the buying and selling of mortgage loans and securities.

In contrast, Fannie Mae, Ginnie Mae, and FHLMC (Freddie Mac) are all key players in the secondary mortgage market. These entities help facilitate the flow of funds into the housing market by purchasing mortgages from lenders, thereby providing them with capital to issue new loans. Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs), which buy and securitize mortgage loans, while Ginnie Mae guarantees securities backed by federally insured or guaranteed loans. Their roles are crucial for maintaining liquidity in the mortgage market.

Thus, RESPA is focused on consumer protection during real estate transactions, whereas the other choices are directly involved in the secondary mortgage market operations, underscoring why RESPA is the correct choice for this question.