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Encyclopedia > Freddie Mac
Freddie Mac
Type Public
Slogan We Open Doors
Founded 1970
Location McLean, VA
Key people Richard Syron, CEO & Chairman
Employees 3,216
Products Financial Services
Web site www.freddiemac.com

The Federal Home Loan Mortgage Corporation ("Freddie Mac") (NYSE: FRE (http://www.nyse.com/about/listed/lcddata.html?ticker=FRE)) is a stockholder-owned, publicly-traded company chartered by the United States federal government in 1970 to purchase mortgages and related securities, and then issues securities and bonds in financial markets backed by those mortgages in secondary markets. Freddie Mac, like its competitor Fannie Mae is regulated by the Office of Federal Housing Enterprise Oversight (OFHEO) in the United States Department of Housing and Urban Development.


Freddie Mac makes money by charging a guarantee fee which is usually a small part of the interest payment of the loans they have securitized into bonds. (For example, Freddie Mac may purchase a loan with a rate of 5.19 percent and put it into a mortgage backed security (MBS) bond which has a 5.0 percent coupon, keeping 0.19 percent as the guarantee fee.) Investors, or purchasers of Freddie Mac MBS, are willing to let Freddie Mac keep this fee in exchange for Freddie's guarantee that the principle of the underlying loan will be paid back according to the loan's payment schedule. This is how Freddie Mac began making money at its inception and continues to do so today. But today, the majority of Freddie Mac's income is derived from the interest rate difference in the corporate debt Freddie Mac issues and the MBS that Freddie Mac's retained portfolio purchases.


The company is based in McLean, Virginia.

Contents

Credit rating

See [1] (http://www.freddiemac.com/investors/credit_reports.html)

  • Senior Long-Term Debt: AAA Aaa AAA
  • Short-Term Debt A-1+ Prime-1 F-1+
  • Subordinated Debt AA- Aa2 AA-
  • Preferred Stock AA- Aa3 AA- Watch Negative
  • Risk-To-The-Government AA- Not Applicable Not Applicable
  • Bank Financial Strength Not Applicable A- Not Applicable

Investigations

As of 2004, Freddie Mac is under investigation for creative accounting practices that may have been aimed more at protecting figures and bonuses than actually managing risk.


Awards

Freddie Mac was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.


See also

Companies

External links

Data


  Results from FactBites:
 
Freddie Mac enforcement case (791 words)
Freddie Mac does not contest, but does not concede, that it violated the Act by using corporate resources to produce campaign fundraising events or collect and transmit contributions from corporate executives to federal candidates.
However, Freddie Mac admits it violated the Act by contributing $150,000 to the RGA in October 2002, a contribution that Freddie Mac contends was intended for the party building fund.
Based on Freddie Mac’s payment of a civil penalty of $3.8 million and agreement to cease and desist from violating the law, the Commission has decided, in exercise of its prosecutorial discretion, to send admonishment letters and take no further action as to former Freddie Mac Chairman and CEO Leland Brendsel, Mr.
Freddie Mac (354 words)
Freddie Mac is a stockholder owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders, such as commercial banks, mortgage bankers, savings institutions and credit unions, in support of homeownership and rental housing.
Freddie Mac is not responsible for the decisions made by its lenders.
Freddie Mac is owned by its shareholders and, like other corporations, is accountable to its shareholders and a board of directors.
  More results at FactBites »

 
 

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