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Freddie Mac

Freddie Mac, officially the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise (GSE) that purchases residential mortgages from lenders and then packages them into securities for sale to investors. The company was created in 1970 by Congress as a way to increase the availability of mortgage credit to borrowers.

Freddie Mac plays a significant role in the mortgage market. In 2020, the company purchased over $1 trillion in mortgages. This helped to keep mortgage rates low and made it easier for people to buy homes.

Freddie Mac is also a major source of liquidity for the mortgage market. When it purchases mortgages from lenders, it provides them with cash that they can use to make more loans. This helps to keep the mortgage market flowing and makes it easier for people to get mortgages.

Freddie Mac is not a government agency, but it is subject to oversight by the Federal Housing Finance Agency (FHFA). The FHFA sets rules and regulations for Freddie Mac and monitors its financial performance.

Freddie Mac has been criticized for its role in the financial crisis of 2008. The company was accused of making too many risky loans and contributing to the housing bubble. However, a 2011 report by the Government Accountability Office found that Freddie Mac was not the primary cause of the crisis.

Despite the criticism, Freddie Mac remains a major player in the mortgage market. The company is expected to continue to play a role in providing liquidity and making mortgages more affordable for borrowers.