Part 1: Real Estate Investment Risk
Many investors have become extremely wealthy by investing in real estate. Countless others have lost everything they had through investing in real estate. Real estate is a high-risk investment, but risks can be managed.
Investing in real estate or the real estate business is lucrative—it offers many prospects of making money. Do you agree with this statement? Why or why not?
Describe at least three major risks of investing in real estate or the real estate business. How can these risks be minimized or their negative impacts offset?
Part 2: FNMA and FHLMC
The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) play an important role in the secondary mortgage market. The FNMA is also known as Fannie Mae, and the FHLMC is also known as Freddie Mac.
Describe the roles of the FNMA and the FHLMC in the United States' housing and mortgage markets. How effective or ineffective have the FNMA and the FHLMC been in the country's housing and mortgage markets?