Which issuer is known for issuing mortgage-backed bonds that can be purchased by investors?

• A. Ginnie Mae
• B. Fannie Mae
• C. Tennessee Valley Authority
• D. Municipalities

Answer: (B)

Mortgage-backed securities are created by pooling residential mortgages and selling the right to the borrowers’ payments to investors as pass-through securities. Fannie Mae is the issuer most closely associated with this process, buying pools of mortgages from lenders and issuing mortgage‑backed bonds that investors can purchase. This securitization provides liquidity to lenders and gives investors a predictable stream of mortgage payments through the MBS structure. The other options don’t fit as the primary issuer of these investor‑accessible mortgage-backed bonds—the TVA and municipalities issue debt for projects or general purposes, while Ginnie Mae also issues MBS but is a government-guaranteed program within a different framework.