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Promissory notes are unique. The obligation to repay a mortgage for a residence was traditionally evidenced by a written-paper-negotiable promissory observe. It is not uncommon for the original lender to then turnaround and resell that note secured by a mortgage to GSE’s (Authorities Sponsored Enterprises) like Fannie Mae, Ginnie Mae, and Freddie Mac. The GSEs then pool, bundle, and repackage notes and mortgages into Mortgage Backed Securities (MBS”) and resell them on the secondary mortgage market to buyers e notes. These are usually seen as low-danger investments as a result of the GSEs guarantee the principal and interest on the notice even when the borrower defaults. Reselling the be aware is how lenders unencumber money to make more loans and the circle of buying and selling notes, which is large enterprise, on the open market continues.
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