The names “Freddie and Fannie” are both well-known among mortgage industry insiders and Realtor’s in the Real Estate world because what Fannie Mae and Freddie Mac do ultimately affect home buyers and homeowners but what specific role does Freddie Mac play in the mortgage market?
In this article we will break down Freddie Mac so you will know the exact role this company plays in the mortgage market.
Since it started in 1970 Freddie Mac has been a major player in the mortgage market because like their sister company Fannie Mae, Freddie Mac buys mortgage backed securities on the secondary market then sells them back to investors.
With the efforts of Freddie Mac there is a greater pool of money available for borrowers to use for their new home purchases.
Following the collapse of the Real Estate market in 2007, and the bailout of Freddie Mac, the company has seen huge growth and their mortgage portfolio has rapidly expanded in the last eight months following slow growth between 2010 and 2014.
“The total mortgage portfolio expanded at a compound annual rate of 3.1 percent in September, the highest rate of the year for any one month. Overall by the end of 2015, the portfolio expanded at an average rate of 1.5 percent. It has expanded for eight consecutive months following January’s contraction at a rate of 0.8 percent. The 3.1 percent annual rate of expansion in September translated to an over-the-month increase of $5.01 billion up to approximately $1.931 trillion.”
Contact Fred Sed Realty
Learn more about Freddie Mac and the role they play in the mortgage market or search for homes in Southern California by calling Fred Sed Realty today at (800) 921-9231