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
During the great depression of the 1930s, the government stepped in and came with an innovative loan to help the banking industry recover, thus putting the whole economy back on track. FHA ...
The definition of a reverse mortgage is important for homeowners 62 and older who want to supplement their retirement income. What exactly is a reverse mortgage? Some say that it is the ...
Refinancing for an amount in excess of the balance on the old loan plus settlement costs. When the main objective of a refinancing is to raise cash, the relevant question is whether the ...
The sum of the monthly mortgage payment, hazard insurance, property taxes, and homeowner association fees. Housing expense is sometimes referred to as PITI, standing for principal, ...
A condominium project with features that lenders view as favorable in terms of their risk exposure on loans secured by individual condo units. The requirements of warrantability include ...
The amount of the original loan remaining to be paid. It is equal to the loan amount less the sum of all prior payments of principal. ...
Also called variable or flexible rate mortgage, an adjustable rate mortgage (ARM) is a mortgage where the interest rate is not constant, but changes over time by the mortgage lender. ...
The amount the borrower owes at maturity. ...
A term that small lenders sometimes use to distinguish themselves from mortgage brokers. ...
Have a question or comment?
We're here to help.