Other measures include down payment assistance, improved underwriting guidelines, reserve funding for emergencies and lowering mortgage insurance premiums.įannie Mae and Freddie Mac are implementing big reforms aimed at helping disadvantaged communities become homeowners and making sure homebuyers of color stay owners.Fannie Mae and Freddie Mac are rolling out a credit reporting system that factors in paying rent into creditworthiness score.In a historic move, Fannie Mae and Freddie Mac announced changes to battle systemic racism that has blocked people of color from homeownership.The Federal Home Loan Mortgage Corporation ( FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with the Federal National Mortgage Association ( Fannie Mae), Freddie Mac buys mortgages, pools them, and sells them as a mortgage-backed security (MBS) to private investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name 'Freddie Mac' is a variant of the FHLMC initialism of the company's full name that was adopted officially for ease of identification. On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA (see Federal takeover of Fannie Mae and Freddie Mac). The action has been described as 'one of the most sweeping government interventions in private financial markets in decades'.

As of the start of the conservatorship, the United States Department of the Treasury had contracted to acquire US$1 billion in Freddie Mac senior preferred stock, paying at a rate of 10% per year, and the total investment may subsequently rise to as much as US$100 billion.

Shares of Freddie Mac stock, however, plummeted to about one U.S.

In 2008, the yield on U.S Treasury securities rose in anticipation of increased U.S.ĭollar on September 8, 2008, and dropped a further 50% on June 16, 2010, when the Federal Housing Finance Agency ordered the stocks delisted. The housing market and economy eventually recovered, making Freddie Mac profitable once again.įreddie Mac is ranked No. 41 on the 2020 Fortune 500 list of the largest United States corporations by total revenue, and has $2.063 trillion in assets under management.

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