Finance
A Minnesota bank originates a mortgage and immediately sells it to Fannie Mae. The bank continues to collect payments and handle borrower communications. This arrangement is called:
AMortgage banking
BLoan origination and retention
CMortgage servicing✓ Correct
DSecondary market participation
Explanation
Mortgage servicing is the ongoing management of a mortgage loan after it is originated, including collecting payments, managing escrow accounts, handling borrower inquiries, and managing defaults. Minnesota lenders frequently sell loans to Fannie Mae while retaining the servicing rights, earning a servicing fee.
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