publicly chartered agency, nicknamed Freddie Mac, which buys qualifying residential mortgages from lenders, packages them into new securities backed by those pooled mortgages, provides certain guarantees, and then resells the securities on the open market.
publicly chartered agency that buys qualifying residential mortgages from lenders, packages them into new securities backed by those pooled mortgages, provides certain guarantees, and then resells the securities on the open market. The corporation's stock is owned by savings institutions across the U.S. and is held in trust by the Federal Home Loan Bank System. The corporation, nicknamed Freddie Mac, has created an enormous secondary market, which provides more funds for mortgage lending and allows investors to buy high-yielding securities backed by federal guarantees. Freddie Mac formerly packaged only mortgages backed by the Veteran's Administration or the Federal Housing Administration, but now it also resells nongovernmentally backed mortgages. The corporation was established in 1970.
