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
Using a brokers time and expertise to become informed and creditworthy, then jumping to the Internet to get the loan. ...
Someone authorized by the original credit card holder to use the holder's card. While authorized users are not responsible for paying any charges, including their own, they are sometimes ...
The rate charged the borrower each period for the loan of money, by custom quoted on an annual basis. A mortgage interest rate is a rate on a loan secured by a specific property. ...
A computer-driven process for informing the loan applicant very quickly, sometimes within a few minutes, whether the application will be approved, denied, or forwarded to an underwriter. ...
A lender who delivers loans to another (usually larger) lender against prior price commitments the larger lender has made to the correspondent. Mortgage brokers sometimes evolve into ...
A mortgage on which the borrower gives up a share in future price appreciation in exchange for a lower interest rate and/or interest deferral. SAM's in the private market had a brief ...
The amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract. Paying less than the scheduled ...
The period you must retain a mortgage in order for it to be profitable to pay points to reduce the rate. ...
A borrower who does not meet the underwriting requirements of mainstream lenders. Sub-prime borrowers pay more than prime borrowers and are sometimes taken advantage of. ...
Have a question or comment?
We're here to help.