Freddie Mac

Written by Patricia Skinner
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Freddie Mac is a stockholder-owned corporation set up by Congress to ensure an uninterrupted supply of funds to mortgage lenders throughout the United States. Freddie Mac helps to ensure that commercial banks, mortgage bankers, savings institutions and credit unions can make mortgages readily available to home buyers. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to home buyers and apartment owners.

How Freddie Mac Works

Freddie Mac operates in a similar way to that of Fannie Mae. Freddie Mac will guarantee a loan to lenders. Once they have paid a lender for expenses incurred due to foreclosure, the Freddie Mac Corporation gets the property deed.

Freddie Mac's revenues come from a combination of private mortgage insurance (PMI) premiums and the proceeds of property sales. This combination allows Freddie Mac to continue to offer attractive special loan programs to different categories of home buyers.

Before you embark on buying a foreclosure home through Freddie Mac or anyone else, make sure you familiarize yourself with the main points of real estate purchase. Buying foreclosure property can present difficulties, so it's important to know where you might find difficulties. Before you commit yourself in any way, whether to an agent promising to help you find a suitable foreclosure or to the purchase of a foreclosure property, make sure you are aware of all the facts pertaining to that transaction. Be aware that all stages of foreclosure purchase have been the subject of scams. Forewarned is forearmed.

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