Freddie Mac Mortgages



Freddie Mac Mortgages - Low Cost Credit



Freddie Mac is a stockholder-owned corporation chartered by Congress to increase the supply of funds that mortgage lenders, such as commercial banks, mortgage bankers, savings institutions and credit unions, can make available to homebuyers and multifamily investors.

Since the corporation was created in 1970, they have provided a continuous and low-cost source of credit to finance America's housing. The corporation achieves this purpose by making mortgage funds available whenever and wherever Americans need them by linking the worldwide capital markets to the U.S. mortgage markets, providing a continuous, reliable and low-cost flow of mortgage capital to finance housing for the nation's homebuyers and renters.



Freddie Mac
creates affordable Mortgages

The corporation conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities (guaranteed by Freddie Mac) to investors. Mortgage lenders use the proceeds from selling loans to the corporation to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Just as stock and bond markets have put investor capital to work for corporations, the secondary mortgage market puts private investor capital to work for homebuyers and apartment owners, providing a continuous flow of affordable funds for home financing.

For the most part, the process is invisible to borrowers and renters. But because the corporation exists, millions of Americans have benefited from lower monthly mortgage payments and better access to home financing. In fact, for 34 years the corporation has opened doors for one in six homebuyers and more than two million renters in America.

Freddie Mac acts as Indirect Lender

Freddie Mac does not make loans directly to homebuyers. After borrowers complete the closing process on their mortgage loans, the corporation buys those mortgages from their approved lenders. The process of replenishing the supply of funds enables the lenders to make more mortgage loans to other borrowers.

Because of the corporation, consumers benefit from lower mortgage interest rates, readily available home mortgage credit, a wider selection of mortgage products and reduced origination costs.

Freddie Mac's job is to buy mortgages from lenders across the country that meet the underwriting and specific program standards that produce investment-quality mortgages; this process contributes to lowering interest rates. The corporation is not responsible for the decisions made by its lenders; however, these guidelines help lenders decide whether a borrower is willing and able to repay the mortgage on time and whether the property is valuable enough to help pay off the mortgage if the borrower defaults on the mortgage payments.

Freddie Mac's Loan Prospector

Loan Prospector, the corporations automated underwriting service, has helped establish a new standard for delivering low-cost financing to homebuyers of all types. The corporation designed Loan Prospector with input from lenders, mortgage insurers, software vendors and other big players within the mortgage industry. They went far beyond simply automating traditional underwriting requirements and reengineered the loan origination process. Through streamlined processes and reduced documentation, Loan Prospector helps give lenders the information they need to make a consistent, fair and reliable lending decision with greater ease than ever before. Loan Prospector helps expand the universe of potential borrowers by factoring in mortgage eligibility alternatives to traditional Freddie Mac underwriting guidelines. And, Loan Prospector has the potential to make homeownership more affordable by helping to lower lenders' loan origination costs. As a result, borrowers can be approved for loans with less hassle, less paperwork and in less time.

Freddie Mac is not an agency of the Federal or any state government nor does the corporation receive federal funds. In fact, the corporation is one of the nation's largest federal taxpayers. The corporation is owned by its shareholders and, like other corporations, is accountable to its shareholders and a board of directors. Freddie Mac's board of directors consists of 13 members. Anyone can own the corporations stock, which is traded under the stock ticker symbol "FRE" on the New York and Pacific Stock Exchanges.

Freddie Mac and Fannie Mae have the same charters, Congressional mandates and regulatory structure. The two companies, however, have different business strategies. Competition between the corporation and Fannie Mae ensures that the benefits of the secondary market are passed on to homebuyers and renters in the form of lower housing costs. Both the corporation and Fannie Mae operate as publicly traded corporations.

Freddie Mac - News

Freddie Mac announced it will not issue a Reference REMIC® security during the week of November 17, 2008. The company's 2008 Reference Notes® and Reference REMIC calendar designates monthly issuance weeks that it may use to issue new Reference REMIC securities.

This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's proxy statement, its Registration Statement on Form 10 dated July 18, 2008 and all documents that Freddie Mac files with the Securities and Exchange Commission ("SEC") pursuant to Section 13(a), 13(c) or 14 of the Securities Exchange Act of 1934.

Freddie Mac's press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Registration Statement on Form 10, dated July 18, 2008, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac raises capital on Wall Street and throughout the world's capital markets to finance mortgages for families across America. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.




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