Sugar Mae Taps Secondary Market

ABA Banking Journal, March 1990 | Go to article overview

Sugar Mae Taps Secondary Market


Sugar Mae taps secondary market

The Mac and Mae clans have a new cousin - Sugar Mae, a Vermont-based secondary mortgage market for rural housing loans.

Sugar Mae differs from the other secondary market agencies in several ways. First, it only serves a statewide audience, not a national one. Second, it is not an independent entity, but rather a program administered by the Vermont Finance Housing Agency, Burlington.

And unlike Freddie Mac or Fannie Mae, its nickname was not derived from the formal name of the program - Green Mountain Mortgage Market - but rather as a tribute to the state's famous maple syrup. Nonconformists. According to Allan S. Hunt, executive director at the Vermont Housing Finance Agency, Sugar Mae's introduction last autumn could not have come at a better time, as local lenders were reporting difficulty in dealing with the national secondary markets.

"Lenders were saying the loans they wanted to make were perfectly credit-worthy," says Hunt, but were unacceptable to the secondary markets for reasons such as the property not being on a paved road or not close enough to a fire hydrant. In other cases, there was too much land attached to the property.

"A lot of these things we have just don't fit into the national secondary market mold," says Timothy Y. Hayward, executive vice-president of the Vermont Bankers Association. He says that for the state's rural housing, it is "not unusual that the heating system might run on wood, for example, or that the owner or mortgage applicant may be a self-employed logger."

Hayward adds that Vermont lenders are being unfairly penalized because of these differences. "We know these are good loans," he says. "The default rate for these loans is very, very low." We can work it out. The situation began to hurt local lenders. "Vermont banks had to curtail their lending activities on those types of properties," recalls Hunt, "or they were doing the loans and putting them in portfolio."

The banks and the VHFA examined the problem and, working with Fannie Mae, came up with Sugar Mae.

Hunt explains how the program works: "If the VHFA would indemnify Fannie Mae for the perceived credit risk of these nonconforming loans, Fannie Mae would be willing to buy up to $100 million. If something goes wrong with them, the VHFA buys them back."

The agency swaps the mortgages for Fannie Mae's mortgage-backed securities, which Hunt hopes to sell to Vermont-based insurance companies and pension funds. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Sugar Mae Taps Secondary Market
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.