Freddie Mac

Freddie Mac ( Federal Home Loan Mortgage Corporation ) is a publicly traded U.S. mortgage bank headquartered in Tysons Corner, Virginia. Freddie Mac buys mortgages from banks, summarizes these loans and bring them as mortgage-backed securities on the capital market. The current name of the company is derived from a quasi - acronym from the abbreviation of its original name, Federal Home Loan Mortgage Corporation ( FHLMC ).

Freddie Mac is a government sponsored enterprise and is supervised by the Office of Federal Housing Enterprise Oversight ( OFHEO ). Currently, the company is the second largest mortgage bank in the United States.

History

Freddie Mac was established in 1968 by the Congress of the United States as the Federal Home Loan Mortgage Corporation, to make the competitors at the same time privatized Fannie Mae and the FHL Banks competition and thus to prevent a monopoly.

An accounting scandal in 2003 led to reshuffles in the upper echelons of the bank. In the years 2000 to 2002, the profits of the enterprise had been under-reported by several billion U.S. dollars.

In 2008 the company came as the rival Fannie Mae due to the real estate crisis in the United States in financial difficulties. On 13 July 2008, the U.S. government announced to support Freddie Mac and Fannie Mae billions of dollars in loans and equity purchases in order to avoid bankruptcy of the two banks. U.S. Senate and U.S. House of Representatives have approved this in the basic principles on July 23. On 7 September 2008, the competent supervisory authority, the Federal Housing Finance Agency ( FHFA ) took control of Freddie Mac. Until July 1, 2009, Freddie Mac has a total received State aid funds in the amount of 51.7 billion dollars.