Definition:
Freddie Mac (Federal Home Loan Mortgage Corporation) was established in 1970 to serve in the secondary mortgage market. It was set up in order to break up Fannie Mae’s monopoly. Freddie Mac purchases mortgages from the banks and then sells them onto other investors in order to spread the risk of the mortgages around. Due to the mortgage crisis of 2007 and 2008 the United States federal government has stepped forward to guarantee any loans that Freddie Mac currently holds.
