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
If you’re a student in medical school, a resident or a medically qualified doctor, you must know the definition of Physicians Mortgage Loan, also known as Doctor Loans. Why? Because, ...
The process of raising cash periodically through successive cash-out refinancings. This is a scam initiated by mortgage brokers that victimizes wholesale lenders, with the connivance of ...
Compiling and maintaining the file of information about the transaction, including the credit report, appraisal, verification of employment and assets, and so on. Mortgage brokers usually ...
A lender who offers mortgage loans directly to the public. ...
The amount the borrower promises to repay, as set forth in the loan contract. The loan amount may exceed the original amount requested by the borrower if he or she elects to include ...
An agreement between a mortgage borrower in distress and the lender that allows the borrower to sell the house and remit the proceeds to the lender. A short sale is an alternative to ...
A document that evidences a debt and a promise to repay. A mortgage loan transaction always includes a note evidencing the debt, and a mortgage evidencing the lien on the property. ...
The interest rate or rates and upfront fees paid to the lender and mortgage broker. Some upfront charges are expressed as a percent of the loan, and some are expressed in dollars. The ...
The maximum allowable decrease in the interest rate on an ARM each time rate is adjusted. It is usually one or two percentage points. ...
Have a question or comment?
We're here to help.