Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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Which organization does NOT buy, sell, or securitize mortgages but instead guarantees mortgage-backed securities?

  1. Fannie Mae

  2. Freddie Mac

  3. Ginnie Mae

  4. Federal Reserve

The correct answer is: Ginnie Mae

Ginnie Mae differs from the other options in that it is not a lending or securitizing entity. Instead, it is a government-owned corporation that guarantees mortgage-backed securities issued by private lenders, similar to how the FDIC guarantees bank deposits. The other options - Fannie Mae, Freddie Mac, and the Federal Reserve - all play a role in purchasing, selling, or securing mortgages, but Ginnie Mae's role is solely to ensure the timely payment of mortgage-backed securities.

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