“Market Cap $2.58 B As of May 2014
At a Glance
- Industry: Investment Services
- Founded: 1970
- Country: United States
- CEO: Donald Layton
- Website: www.freddiemac.com
- Employees: 5,053
- Sales: $62.22 B
- Headquarters: McLean, Virginia
#377 Global 2000
- #126 in Sales
- #2 in Profit
- #14 in Assets
Federal Home Loan Mortgage Corp., doing business as Freddie Mac, provides liquidity, stability and affordability to the U.S. housing market primarily by providing credit guarantee for residential mortgages originated by mortgage lenders and investing in mortgage loans and mortgage-related securities. The company conducts business in the U.S. residential mortgage market and the global securities market under the direction of Conservator, FHFA, and under regulatory supervision of FHFA, the SEC, HUD, and Treasury. It operates through three reportable segments include: Single-family Guarantee, Investments and Multifamily. The Single-Family Guarantee segment reflects results from the company’s single-family credit guarantee activities. In this segment, the company purchases single-family mortgage loans originated by its seller/servicers in the primary mortgage market. The Investments segment reflects results from the company’s investment, funding and hedging activities. In this segment, the company invests principally in mortgage assets funded by debt issuances and hedged using derivatives. The Multifamily segment reflects results from the company’s investments and guarantee activities in multifamily mortgage loans and securities. Its new purchases of multifamily mortgage loans are primarily made for purposes of aggregation and then securitization, which supports the availability of financing for multifamily properties. Freddie Mac was founded on July 24, 1970 and is headquartered in McLean, VA.“
“Freddie Mac History
From 1938 to 1968, the Federal National Mortgage Association (Fannie Mae) was the sole institution that bought mortgages from depository institutions, principally savings and loan associations, which encouraged more mortgage lending and effectively insured the value of mortgages by the US government. In 1968, Fannie Mae split into a private corporation and a publicly financed institution. The private corporation was still called Fannie Mae and its charter continued to support the purchase of mortgages from savings and loan associations and other depository institutions, but without an explicit insurance policy that guaranteed the value of the mortgages. The publicly financed institution was named the Government National Mortgage Association (Ginnie Mae) and it explicitly guaranteed the repayments of securities backed by mortgages made to government employees or veterans (the mortgages themselves were also guaranteed by other government organizations).
To provide competition for the newly private Fannie Mae and to further increase the availability of funds to finance mortgages and home ownership, Congress then established the Federal Home Loan Mortgage Corporation (Freddie Mac) as a private corporation through the Emergency Home Finance Act of 1970. The charter of Freddie Mac was essentially the same as Fannie Mae’s newly private charter: to expand the secondary market for mortgages and mortgage backed securities by buying mortgages made by savings and loan associations and other depository institutions. Initially, Freddie Mac was owned by the Federal Home Loan Bank System and governed by the Federal Home Loan Bank Board.
In 1989, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) revised and standardized the regulation of Fannie Mae and Freddie Mac. It also severed Freddie Mac’s ties to the Federal Home Loan Bank System. The Federal Home Loan Bank Board (FHLBB) was abolished and replaced by different and separate entities. An 18-member board of directors for Freddie Mac was formed, and subjected to oversight by the U.S. Department of Housing and Urban Development (HUD). Separately, The Federal Housing Finance Board (FHFB) was created as an independent agency to take the place of the FHLBB, to oversee the 12 Federal Home Loan Banks (also called district banks).
In 1995, Freddie Mac began receiving affordable housing credit for buying subprime securities, and by 2004, HUD suggested the company was lagging behind and should “do more.”
Freddie Mac was put under a conservatorship of the U.S. Federal government on Sunday, September 7, 2008.“
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “freddiemac“