Answered step by step
Verified Expert Solution
Question
1 Approved Answer
When mortgage originators like banks can turn around and sell mortgages to Fannie Mae and Freddie Mac with no concern for possible default by the
When mortgage originators like banks can turn around and sell mortgages to Fannie Mae and Freddie Mac with no concern for possible default by the borrower, how will this arrangement influence the incentive of the originators to scrutinize the creditworthiness of the borrower? Would the incentive structure be different if the originator planned to hold the mortgage until it was paid off? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started