Jumat, 13 Februari 2009

About The Federal Home Loan Mortgage Corporation

The Federal Home Loan Mortgage Corporation (TFHLMC) is a Government Sponsored Enterprise (GSE), with special designated authority from Congress to provide a secondary market for residential mortgages. In that unique role, TFHLMC, like other mortgage related GSE entities such as Fannie Mae, underwrites a vast mortgage portfolio made up of real estate loans from all across the U.S. Fannie and TFHLMC handle the majority of residential mortgages made in this country. This is meant to offer extra security and confidence to investors so that they'll purchase the loans from banks and other mortgage lenders. When investors are eager to buy GSE-backed loans, it ensures a smoother mortgage market, and translates into more affordable home loans for the average American.

During 2008, both Fannie Mae and TFHLMC fell on hard times. Instead of rescuing the housing market, the twin GSE agencies needed to be saved by taxpayers. The government stepped in to buy up many of the loans in the TFHLMC mortgage portfolio. Freddie received almost $14 billion of taxpayer money after a record third-quarter loss, and a government-appointed regulator put 10 new directors in charge of the agency, including seven new executives. Nervous investors seem to be appeased, because now TFHLMC is doing a brisk business.

Back in November 2008, only two months after TFHLMC was placed under government control, its mortgage portfolio grew by more than 65 percent within a single month. That marked the second straight month of serious growth, countering the bad news of the previous two months, when Freddie's mortgage portfolio plummeted in value. Now, its assets are worth more than $800 billion, and its year-to-year gains set a new company record.

In a further attempt to bring down loan interest rates more and help borrowers, the Fed says it plans to buy as much as $100 billion of the corporate debt now encumbering Fannie Mae and TFHLMC. The FHA is also shouldering more responsibility by guaranteeing a greater number of loans and offering more affordable terms to homeowners.

The news isn't all comforting, however, because the delinquency rate on single-family loans guaranteed by TFHLMC didn't fall in November, but instead, rose to more than 1 1/2 percent. The previous year, that rate was almost a full point lower, but the housing markets continue to suffer as the real estate economy weathers more foreclosures and price declines. As people lose jobs and income, and their mortgage balances far outstrip the value of their homes, many experts expect to see more defaults and foreclosures.

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