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Understanding Freddie Mac

The Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac, is a government-sponsored enterprise chartered by Congress in 1970 to provide liquidity to mortgage lenders and promote homeownership. Freddie Mac purchases, guarantees, and securitizes mortgages to create mortgage-backed securities. Congress established Freddie Mac to expand the secondary mortgage market and reduce interest rate risk for banks. In 1989, Freddie Mac was reorganized as a shareholder-owned company under the Financial Institutions Reform, Recovery and Enforcement Act.

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16 views1 page

Understanding Freddie Mac

The Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac, is a government-sponsored enterprise chartered by Congress in 1970 to provide liquidity to mortgage lenders and promote homeownership. Freddie Mac purchases, guarantees, and securitizes mortgages to create mortgage-backed securities. Congress established Freddie Mac to expand the secondary mortgage market and reduce interest rate risk for banks. In 1989, Freddie Mac was reorganized as a shareholder-owned company under the Financial Institutions Reform, Recovery and Enforcement Act.

Uploaded by

Suraj Kumar
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Federal Home Loan Mortgage Corp (FHLMC) is a stockholder-owned, government-sponsored

enterprise (GSE) chartered by Congress in 1970 to keep money flowing to mortgage lenders in


support of homeownership and rental housing for middle-income Americans. The FHLMC,
familiarly known as Freddie Mac, purchases, guarantees, and securitizes mortgages to
form mortgage-backed securities.

Understanding Freddie Mac


Freddie Mac was created when Congress passed the Emergency Home Finance Act in 1970. This
was done in an attempt to expand the secondary mortgage market while reducing interest rate
risk for banks. In 1989, Freddie Mac underwent a reorganization and was turned into a
shareholder-owned company, now under the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA)

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