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Federal Home Loan Mortgage Corp. (FHLMC)

From Kimberly Amadeo,
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What Freddie Mac Is: Freddie Mac is the Federal Home Loan Mortgage Corporation, or FHLMC. It was created by the Emergency Home Finance Act of 1970 to create a secondary market for conventional mortgages. It then packages these into mortgage-backed securities, and resells them to investors in the stock market. It is listed on the NYSE.
What Freddie Mac Does: Freddie Mac affects the U.S. Economy by;
  • By lowering interest rates, Freddie Mac makes more loans available to more new homeowners. For example, lowering the rate from 8.5% to 8% would allow 791,000 low- and moderate-income families buy homes. (Source: Freddie Mac web site )
  • Freddie Mac also makes interest rates more consistent. Across the nation's cities, mortgage rates varied by as much as 1.7% in 1970. Today, that difference is only 0.1%.
  • Freddie Mac stimulates the housing market, which comprises 10% of the economy. By doing so, it creates wealth for homeowners who receive greater equity from higher-priced homes.
How Freddie Mac Affects You: Freddie Mac lowers the interest rates on the mortgages you get from the bank. In fact, it estimates it lowers the rate .5%, which translates to a $12,000 over the life of a $100,000 loan.

Freddie Mac also provides monthly housing market analyses. If you are thinking of buying or selling a home, take a look at their reports to get a better idea of what is happening in the real estate market, and to look at current interest rates.
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