This is a good — and frequently asked — question.

To understand what’s going on now, you have to know at least the fundamentals of how the mortgage industry operates.

When a lender underwrites, approves and finds a loan application, they do so with the intent of selling that loan on the secondary mortgage market. Fannie Mae and Freddie Mac are two of the best-known participants, although there are many more.

The lender sells the newly-funded loan at a profit — over the face amount of the loan. …

Joe Parsons

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