California Real Estate Practice Exam

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Which of the following does not buy mortgages?

GNMA
Fannie Mae
Freddie Mac
Ginnie Mae

The correct answer is: GNMA

GNMA stands for Government National Mortgage Association, also known as Ginnie Mae. It is a government-owned corporation that buys mortgages insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA), unlike the other options listed which are private entities. Therefore, GNMA does not buy mortgages but rather guarantees them. This sets it apart from Fannie Mae and Freddie Mac, which are government-sponsored enterprises that buy mortgages from banks and other lenders in order to provide more funds for home loans. While GNMA may not directly purchase mortgages, it plays a crucial role in the secondary mortgage market by providing a government guarantee for certain types of loans.