Finance
In Minnesota, a lender who 'sells' a mortgage to Fannie Mae in the secondary market retains which function?
AThe lender retains ownership of the loan
BThe lender typically retains the loan servicing function—collecting payments, managing escrow, and handling borrower inquiries✓ Correct
CThe lender retains all rights to future interest income
DThe lender has no further involvement with the loan
Explanation
When a Minnesota lender sells a mortgage to Fannie Mae (or Freddie Mac) in the secondary market, it usually retains the loan servicing function under a servicing agreement. The servicer collects monthly payments, manages escrow accounts, handles delinquencies, and communicates with borrowers—earning a servicing fee. The investor (Fannie Mae) owns the loan.
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