Who are Fannie Mae and Freddie Mac?
“Are Fannie Mae and Freddie Mac actual people?”
The answer is no, they aren't. They are government agencies that insure our mortgage loans for us. They set conventional loan lending guidelines. If you hear of a conventional loan, most likely, it is insured by Fannie Mae or Freddie Mac. Aside from setting parameters and guidelines, they have also created a software to help mortgage lenders in making their loan related decisions quicker. DU (Desktop Underwriter) and LP (Loan Prospector) are two programs owned by those these entities used by mortgage lenders to determine if a loan can be sold (insured) to them (Fannie Mae or Freddie Mac) or not. They do not directly service loans. The mortgage companies do that. Fannie or Freddie just pays for the loan just in case it goes in to default.
So the next time you encounter a bank-owned property, it could be owned by either Fannie Mae or Freddie Mac.
Fannie Mae stands for The Federal National Mortgage Association.
Freddie Mac stands for The Federal Home Loan Mortgage Corporation.