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Freddie Mac

Federal Home Loan Mortgage Corporation
Company nameFederal Home Loan Mortgage Corporation (Freddie Mac)
Company typeGovernment-sponsored enterprise & Public company (Otcbb - FMCC)
SloganWe Make Home Possible
IndustryCredit services
HeadquartersTysons Corner, Virginia, U.S.
Key peopleCharles E. Haldeman, CEO
ProductsFinancial services
Revenue(+) US$14.3 Billion (FY 2009)
Operating income(-) US$-22.4 Billion (FY 2009)
Net income(-) US$-21.5 Billion (FY 2009)
Total assets(-) US$-841.8 Billion (FY 2009)
Total equity(+) US$4.4 Billion (FY 2009)
Employees5,300 (2010)

     Home | Company | Federal Home Loan Mortgage Corporation

The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac (Otcbb - FMCC), is a public government sponsored enterprise (GSE), headquartered in the Tyson's Corner CDP in unincorporated Fairfax County, Virginia.

The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases. The name, "Freddie Mac", is an acronym of the company's full name that had been adopted officially for ease of identification (see "GSEs" below for other examples).

On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA (see Federal takeover of Fannie Mae and Freddie Mac). The action has been described as "one of the most sweeping government interventions in private financial markets in decades".

Moody's gave Freddie Mac's preferred stock an investment grade rating of A1 until August 22, 2008, when Warren Buffett said publicly that both Freddie Mac and Fannie Mae had tried to attract him and others. Moody's changed the credit rating on that day to Baa3, the lowest investment grade credit rating. Freddie's senior debt credit rating remains Aaa/AAA from each of the major ratings agencies Moody's, S&P, and Fitch.As of the start of the conservatorship, the United States Department of the Treasury had contracted to acquire US$1 billion in Freddie Mac senior preferred stock, paying at a rate of 10% per year, and the total investment may subsequently rise to as much as US$100 billion.

Home loan interest rates may go down as a result and owners of Freddie Mac debt and the Asian central banks who had increased their holdings in these bonds may be protected. Shares of Freddie Mac stock, however, plummeted to about one U.S. dollar on September 8, 2008, and dropped a further 50% on June 16, 2010, when the Federal Housing Finance Agency ordered the stocks delisted. In 2008, the yield on U.S Treasury securities rose in anticipation of increased U.S. federal debt.

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