Finance
A Texas homebuyer's loan is sold to Fannie Mae after closing. The buyer's monthly payments now go to the loan servicer, who in turn remits the principal and interest to Fannie Mae. This process describes:
AA wraparound mortgage
BThe secondary mortgage market and mortgage servicing system✓ Correct
CA participation loan
DA government-guaranteed loan
Explanation
When a lender originates a mortgage and sells it to Fannie Mae, the loan moves from the primary market (where it was originated) to the secondary market. The original lender or a third-party servicer collects payments from the borrower and remits principal and interest to the investor (Fannie Mae). This system provides liquidity that allows lenders to make more loans.
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