Freddie Mac
Definition of "Freddie Mac"
Someone recommended you should reach out to Freddie Mac and you came here looking for him. No, he's not a registered real estate agent at The OFFICIAL Real Estate Agent Directory ®. Not a cousin to the late Bernie Mac either. Freddie Mac is more like Fannie Mae’s younger friend that helps but also disturbs. But plot twist: Freddie Mac is not actually a person! So let’s give the correct Freddie Mac definition and get this done with:
Freddie Mac is the way people commonly call the Federal Home Loan Mortgage Corporation (FHLMC), a company created to expand the second mortgage market in the US. Here’s the deal: with the success of Fannie Mae restoring the housing market after the Great Depression, it became a private corporation that needed some competition. To provide that, the US Congress created through the Emergency Home Finance act of 1970 this federally chartered corporation called Freddie Mac to buy pools of mortgages from lenders and sell securities bonds backed by these mortgages.
Freddie Mac's business model is basically keeping a fee in exchange for assuming the credit risk from investors. They don’t directly lend to borrowers; they buy specific loans allowing lenders to have space and money to lend to more clients, thus pushing for more housing development. So, as you can see, that Freddie Mac is one slick guy. He guarantees that the principal and the interest loan are paid regardless if the borrower actually pays.
If you can’t figure out which will give the best solution to your problem, check out the Fannie Mae, Freddie Mac or Ginnie Mae definition or contact a local real estate agent to look out for this one on your behalf!
Popular Mortgage Terms
Trying to find the best deal on a mortgage. It isn't easy to do right, as a summary of the major steps involved will demonstrate. Step 1: Decide if you are a potential shopper. Step 2: ...
The amount the borrower owes at maturity. ...
Interest from the day of closing to the first day of the following month. To simplify the task of loan administration, the accounting for all home loans begins as if the loan was closed ...
The form that lists the settlement charges the borrower must pay at closing, which the lender is obliged to provide the borrower within three business days of receiving the loan application. ...
A mortgage that does not meet the purchase requirements of the two federal agencies, Fannie Mae and Freddie Mac, because it is too large or for other reasons, such as poor credit or ...
The interest rate adjusted for intra-year compounding. Because interest on a mortgage is calculated monthly, a 6% mortgage actually has a rate of .5% per month. If there were no principal ...
A clause in the note that allows the lender to demand repayment of the balance in full. A demand clause is even better (for the lender) than an acceleration clause. An acceleration clause ...
The policy of a second mortgage lender toward allowing a borrower to refinance the first mortgage while leaving the second in place. ...
The period used to calculate the monthly mortgage payment. The term is usually but not always the same as the maturity, which is the period over which the loan balance must be paid in ...
Have a question or comment?
We're here to help.