Federal Home Loan Mortgage Corporation
Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, government-sponsored enterprise that uses private capital to buy home mortgages as a means to help lower housing costs. A sister institution to the Federal National Mortgage Association (Fannie Mae), as well as a sometime competitor, Freddie Mac aims to foster liquidity, stability, and affordability in the U.S. mortgage market to give Americans the opportunity to afford housing. Chartered by Congress in 1970, it purchases mortgages from a variety of lenders and issues numerous publicly offered securities backed by those mortgages; it also retains some securities in its portfolio. One of the country's biggest buyers of home mortgages, by the early years of the 21st cent. Freddie Mac had provided help to over 46 million families, or approximately one in every six American homes. However, disclosures in 2003 that Freddie Mac had misstated its earnings for 2000–2002 damaged its credibility. In 2008 housing-market and mortgage-default problems that began in 2007 led to significant losses at Freddie Mac and concerns about its undercapitalization and possible bankruptcy. It and Fannie Mae, which was in less severe financial straits, were taken over by the federal government in Sept., 2008, in an attempt avoid a collapse of confidence in the U.S. mortgage-financing system. Freddie Mac has its headquarters in McLean, Va.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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