The lenders receive cash, which in turn allows them to make more loans to other borrowers. Freddie Mac is a major buyer of these mortgages. The lender may then choose to either hold this mortgage in its portfolio or sell it in the secondary mortgage market. If a homebuyer demonstrates the creditworthiness and means to get a mortgage from a lender (such as a bank, savings and loan, credit union, etc.), the lender agrees to transfer money to the borrower’s account and the borrower agrees to repay the lender according to a set schedule. Rather, it purchases mortgages from lenders. These organizations not only ensure the financial soundness of Freddie Mac, they require Freddie Mac to purchase a certain percentage of mortgages for low- and moderate-income housing, which facilitates mortgage lending in those markets.įreddie Mac does not lend to homebuyers. Department of Housing and Urban Development (HUD) and the Office of Federal Housing Enterprise Oversight (OFHEO) regulate and oversee Freddie Mac. ![]() The Freddie Mac board has 18 directors the President of the United States appoints five of these directors. ![]() Like other corporations, it is owned by its shareholders and overseen by its board of directors. Although Congress created it in 1970, the Federal Home Loan Mortgage Corporation is not a government agency and does not receive federal funding.
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