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Wednesday, December 28, 2011

We’ve heard of Freddie Mac; what is it?

We’ve heard of Freddie Mac; what is it?


Freddie Mac was created by the United States Congress in 1970. Its publicly stated mission is to stabilize the nation's residential mortgage markets and expand opportunities for homeownership and affordable rental housing. Under Federal law, Freddie Mac’s mission is to:



  1. provide stability in the secondary market for residential mortgages;

  2. respond appropriately to the private capital market;

  3. provide ongoing assistance to the secondary market for residential mortgages (including for lower income families); and

  4. to promote access to mortgage credit.


Freddie Mac does not loan money to would-be property owners the way that banks do. Rather, it participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities. The secondary mortgage market consists of institutions engaged in buying and selling mortgages in the form of whole loans (i.e., mortgages that have not been securitized) and mortgage-related securities.


Due to the housing/mortgage crisis in America, Freddie Mac currently focuses on “meeting the urgent liquidity needs of the U.S. residential mortgage market, lowering costs for borrowers and supporting the recovery of the housing market and U.S. economy.” Specifically, Freddie Mac states that it is working toward reducing the number of foreclosures; making homeownership and rental housing more affordable; and helping families keep their homes.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions. These professional services may include dealing with mortgage loans owned or securitized by Freddie Mac.

Friday, December 23, 2011

We’ve heard of Fannie Mae; what, exactly, is it?

We’ve heard of Fannie Mae; what, exactly, is it?


Fannie Mae was created by the United States Congress in 1938 to support liquidity, stability, and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae itself has stated that it has “a mission to expand affordable housing”.


Fannie Mae does not originate loans or lend money directly to consumers in the primary mortgage market because Federal law prevents it from doing so. However, it does purchase mortgage loans and mortgage-related securities. In other words, while you can’t get a loan from Fannie Mae, Fannie Mae might end up owning your mortgage loan.


Fannie Mae also often securitizes mortgage loans originated by lenders into Fannie Mae mortgage-backed securities (called Fannie Mae MBS)  and makes other investments which are intended to increase the supply of affordable housing.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions. These professional services may include dealing with mortgage loans owned or securitized by Fannie Mae.