[101voodoo]

Simply put, the MCGE buys mortgages from banks, pools them into securities, pays an insurance premium to a new government fund and then sells them to investors with government guarantees against the default of those securities. So the investors take the interest rate risk but they are not taking a credit risk. How is this different then FANNIE MAE? A FANNIE MAE FUND is made up of government securities and government backed securities which back mortgages.

[101voodoo]

Oops, I confused FANNIE MAE with GINNIE MAE, my bad.