Company Profile Freddie Mac - $0.00 - The Loan Store Online

The Loan Store Online
The Loan Store Online

Freddie Mac

Company Profile

Every day we help millions of families in neighborhoods across America buy their own homes or enjoy quality and affordable rental housing by linking them to the world's capital markets. In the process we reduce the costs of housing finance and expand housing opportunities for all families, including low-income and minority families. It is a unique mortgage finance system that makes homeownership a reality for more of America's families.

To further support our mission, we initiate community development lending projects and promote consumer education to improve financial literacy. This helps build strong families and thriving neighborhoods in the communities we help finance.

Our Mission

Freddie Mac's mission is to provide liquidity, stability and affordability to the housing market.

Congress defined this mission in our 1970 charter [PDF 54K], which lays the foundation of our business and the ideals that power our goals.

Our mission forms the framework for our business lines, shapes the products we bring to market and drives the services we provide to the nation's housing and mortgage industry. Everything we do comes back to making America's mortgage markets liquid and stable and increasing opportunities for homeownership and affordable rental housing across the nation.

Our mission strives to create:

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Stability: Freddie Mac's retained portfolio plays an important role in making sure there's a stable supply of money for lenders to make the home loans new homebuyers need and an available supply of workforce housing in our communities.
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Affordability: Financing housing for low- and moderate-income families has been a key part of Freddie Mac's business since we opened our doors. Freddie Mac's vision is that families must be able both to afford to purchase a home and to keep that home.
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Liquidity: Freddie Mac makes sure there's a stable supply of money for lenders to make the loans new homebuyers need. This gives everyone better access to homefinancing, raising the roof on homeownership opportunity in America.

Our Business

We connect Main Street – the residential mortgage market – to Wall Street – dealers and investors – through our mortgage purchase, credit guarantee and portfolio investment activities.

Our customers are predominately lenders in the primary mortgage market. Our activity in the secondary mortgage market supports a continuous flow of funds to the primary market, which leads to consumer benefits in the form of a steady flow of low-cost mortgage funding. This flow of funds helps moderate cyclical swings in the housing market, redistributes the flow of mortgage funds regionally throughout the U.S. and provides for the availability of mortgage funds at all times. In addition, the supply of cash made available to lenders through this process lowers mortgage rates, making homeownership affordable for more families and individuals.

Lending institutions extend mortgage loans directly to their customers who wish to purchase or refinance a home. Often, lenders look to Freddie Mac to purchase those mortgages from them, replenishing the supply of money for lending. One of the means by which we fund purchases of mortgages loans is through the use of securitization-based financing. We issue a mortgage-related security that represents an undivided interest in the mortgage loans we purchase. We then provide a guarantee of the payment of principal and interest on all securities. Our customers may choose to hold these securities in their portfolios or sell them to other investors.

Freddie Mac also purchases mortgage loans and mortgage-related securities and holds them in our Retained Portfolio for investment purposes. We finance these purchases by issuing short-, medium-, and long-term debt and subordinated debt and equity securities. Our purchases replenish the sources of capital available for mortgage lending to consumers.

Currently we buy one mortgage every seven seconds to help finance one in six American homes. We also buy mortgages for multifamily buildings that offer rental housing to families, and in this way allow renters to have access to affordable homes as well.

Here's how it all works for residential single-family mortgages:

* A homeowner sends the monthly payment to the lender or a mortgage servicer that manages the payments.
* The servicer keeps a small fee for managing the borrowers' payments and sends the rest of the monthly payment to Freddie Mac.
* Freddie Mac passes through the remainder of the mortgage payment to investors who hold our mortgage securities.

Because Freddie Mac exists, millions of Americans benefit from lower mortgage interest rates, readily available home mortgage credit, a wide choice of mortgage products and reduced loan origination costs. Millions of families are also able to rent safe and affordable homes.
Financial Management

To achieve our mission – to lower costs and increase access to quality housing for more of America's families – we must be the best.

This means we need the best accounting practices, controls, and financial disclosures. Transparent and accurate financial information is the cornerstone of our commitment to support and expand America's housing system. Federal oversight helps us play our vital role.

As part of our financial management we build long-term value for our shareholders and meet our regulators' capital requirements—to ensure that we have enough cash on hand to sustain our nation's mortgage market through economic hard times.