Freddie Mac Overview: Freddie Mac, the Federal Home Loan Mortgage Corporation, or FHLMC, was chartered by Congress in 1970. It was designed to provide competition for Fannie Mae. Like Fannie Mae, Freddie Mac was set up as a private corporation independent of the federal government, but with an implicit federal guarantee of its creditworthiness.
In recent years, Freddie Mac has been embroiled in controversy over its accounting and business practices. On September 7, 2008, after mounting worries about Freddie Mac's solvency, the federal government took direct control, placing Fannie Mae under the conservatorship of the Federal Housing Finance Agency (FHFA).
Size: Freddie Mac reports these figures for July 31, 2008:
- Mortgage Portfolio = $2.2 trillion
- Employees = 5,000
Positives: As at Fannie Mae, the crisis at Freddie Mac offers opportunities for energetic and talented people who are eager to be part of the solution. There is bound to be a housecleaning of the management ranks, opening up opportunities for new blood.
The federal conservatorship intervention ensures that Freddie Mac will have access to federal funding and thus will remain solvent.
Negatives: The cleanup process at Freddie Mac will be long and difficult, undoubtedly putting stress on staff.
