Who Is Freddie Mac

7-5-2012

Freddie Mac is also known as Federal Home Loan Mortgage Corporation (FHLMC).

Freddie Mac was created in 1970 through Congress with the goal to stabilize the nation's residential real estate mortgage markets, which allows for more opportunities for homeownership and affordable rent. According to their website their mission is to "provide liquidity, stability, and affordability to the US housing market". So how is this done you ask? Freddie Mac plays a key role in the secondary mortgage market by purchasing mortgage loans, issuing guaranteed mortgage related securities and purchasing mortgage related securities. They allow banks and lenders to reinvest their assets as well as free them up to loan money to other homeowners wanting a loan.

Keep in mind you cannot get a loan from Freddie Mac, they only deal in the secondary mortgage market namely institutions who are in the business of buying and selling mortgages. There aim is to meet the needs of the mortgage market allowing more people to own homes, keeping rent is affordable, keeping families in their homes and reducing foreclosures.

Here is a great video that gives you the history of Freddie Mac, the role they play in the secondary mortgage market, how they get the money to securitize the loans, and how they help to support stability in the US housing market.