FinanceIntermediateAlaska Exam

In Alaska, a lender who 'sells' a mortgage loan it has originated is selling it to:

AAnother bank at a discount
BThe secondary mortgage market (such as Fannie Mae or Freddie Mac)Correct
CThe state of Alaska housing agency, though this can vary by county
DThe Federal Reserve

Why The secondary mortgage market (such as Fannie Mae or Freddie Mac) Is Correct

Answer B: The secondary mortgage market (such as Fannie Mae or Freddie Mac)

When primary market lenders sell mortgage loans, they typically sell them to the secondary mortgage market — principally Fannie Mae, Freddie Mac, or Ginnie Mae — which pools them into mortgage-backed securities. This replenishes the lender's capital to make new loans.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

Key Finance Terms in This Question

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