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Financial Institutions Reform Recovery Enforcement Act (FIRREA):
The Financial Institutions Reform Recovery Enforcement Act, or FIRREA for short, is a set of rules that help control how banks and other financial institutions work, especially when they deal with buying and selling mortgages to others in a process known as the Secondary Mortgage Market.
A local bank gives out home loans to people who want to buy houses. After a while, the bank decides to sell these loans to another company that specializes in buying and managing mortgages. FIRREA sets the guidelines and rules that the bank and the mortgage-buying company must follow to make sure everything is done fairly and correctly.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
FIRREA, a name quite grand, it's a law that takes a stand,
With rules so strict and clear, for banks and mortgages, my dear.
When a bank loans cash to buy a home, and then decides it's time to roam,
It sells the loans to someone new, in the Secondary Mortgage Market, it's true.
FIRREA says, "Now wait a bit, let's make sure these transactions fit,
With regulations we'll define, the process will be just fine."
So banks and companies, you see, must follow FIRREA with glee,
To ensure the market's fair and right, and every mortgage shines so bright.