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Chapter 10. Real Estate and Other Invest... > Federal Agency Mortgage-Backed Secur...

Federal Agency Mortgage-Backed Securities

Mortgage-backed securities are actually a bond type of investment backed by real estate loans. There are three forms of mortgage-backed investments that all have government or quasi-government backing, making them very safe investments. However, they are a bit unpredictable… but more on that later.

The government wanted to ensure that there would always be a readily available pool of money for individuals to purchase homes. In 1968, the Government National Mortgage Association (also known as Ginnie Mae) was created to serve low- to moderate-income homeowners. Ginnie Mae takes enormous numbers of mortgages issued through the Veterans Administration and Federal Housing Authority and packages them up to sell to large institutional investors.


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