Freddie Mac (Federal Home Loan Mortgage Corporation)
Freddie Mac (Federal Home Loan Mortgage Corporation) is a government-sponsored enterprise (GSE) that was created in 1970 to provide liquidity, stability, and affordability to the U.S. housing market. It is one of the two GSEs that are chartered by Congress to provide liquidity to the mortgage market. Freddie Mac purchases mortgages from lenders, pools them, and sells them as mortgage-backed securities (MBS) to investors. It also provides credit enhancements and other services to help lenders manage their mortgage portfolios.
History of Freddie Mac
Freddie Mac was created in 1970 as part of the Housing and Urban Development Act of 1968. It was created to provide liquidity to the secondary mortgage market and to ensure that mortgage lenders had access to a steady supply of funds. Freddie Mac was initially owned by the Federal Home Loan Bank System, but it was privatized in 1989. Since then, it has been a publicly traded company.
Freddie Mac has played an important role in the U.S. housing market. It has helped to make mortgages more affordable and accessible to a wider range of borrowers. It has also helped to create a more liquid and efficient secondary mortgage market. Freddie Mac has also been instrumental in helping to create a more stable housing market by providing liquidity during times of economic stress.
Comparison Table
| Feature | Fannie Mae | Freddie Mac |
|---|---|---|
| Type of Entity | Government-Sponsored Enterprise (GSE) | Government-Sponsored Enterprise (GSE) |
| Year Established | 1938 | 1970 |
| Purpose | Provide liquidity to the secondary mortgage market | Provide liquidity to the secondary mortgage market |
| Ownership | Privately owned | Publicly traded |
Summary
Freddie Mac (Federal Home Loan Mortgage Corporation) is a government-sponsored enterprise (GSE) that was created in 1970 to provide liquidity, stability, and affordability to the U.S. housing market. It is one of the two GSEs that are chartered by Congress to provide liquidity to the mortgage market. Freddie Mac purchases mortgages from lenders, pools them, and sells them as mortgage-backed securities (MBS) to investors. It also provides credit enhancements and other services to help lenders manage their mortgage portfolios. For more information about Freddie Mac, visit their website at https://www.freddiemac.com/.
See Also
- Fannie Mae
- Mortgage-Backed Securities (MBS)
- Secondary Mortgage Market
- Credit Enhancements
- Housing and Urban Development Act of 1968
- Federal Home Loan Bank System
- Mortgage Lenders
- Mortgage Portfolios
- Liquidity
- Stability
