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Refinance Purchase Home Equity

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What Is A Mortgage Swap?

By Bob Redtree

With today’s economy most everyone is interested in saving money especially when it come to mortgages. Here are top ways to save money on your home equity loan with a mortgage swap.

A mortgage swap gives you the opportunity to exchange your mortgage loan for pass-through securities or participation certificates that are supported by the same mortgages. In lieu saving you money.

How to Save with Mortgage Swaps

With a mortgage swap you can acquire securities guaranteed by federal mortgage agencies to improve asset quality in loan portfolios, take low-rate assets off the balance sheet, and obtain acceptable collateral for Repurchase Agreements and Reverse Repurchase Agreements.

What are Participation Certificates or Pass-through Securities?

Participation Certificates or Pass-through Securities are federally funded incentives for lenders. They are intended to help rescue the nation’s failing housing market through lowering monthly mortgage payments by refinancing or modifying a current loan using President Barack Obama’s Making Home Affordable program.

Who has Participation Certificates or Pass-through Securities for Mortgage Swaps?

The government plans to offer incentives to mortgage lenders to get rid of second liens on loans modified under the Making Home Affordable program. You can qualify for the new finance plan if a homeowner has a conforming loan securitized or owned by Freddie Mac or Fannie Mae. There are many mortgage lenders who swap mortgages with Fannie Mae or Freddie Mac. This can be done through a mortgage swap.

Who is Fannie Mae and Freddie Mac?

Fannie Mae purchases mortgages and mortgage-backed securities from financial institutions and guarantees timely payment of principal and interest to buyers. It is a federally chartered corporation who is the largest source of home mortgage funding in the United States. Fannie Mae creates mortgage-backed securities in exchange for the loans.

Freddie Mac is a investor-owned corporation chartered by Congress in 1970. Freddie Mac provides funding to mortgage lenders by selling debt securities, purchasing mortgages and mortgage-backed securities.

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2. Is A Fed Rate Cut Really Good News For Mortgage Rates?
3. What Is A HARP Mortgage Loan?
4. What Is A Non-Conforming Mortgage?
5. Who Exactly Sets Mortgage Interest Rates?