Freddie Mac

The Federal Home Loan Mortgage Corporation, known colloquially as Freddie Mac, is a U.S. government sponsored enterprise (GSE) that was launched in 1970 to expand the secondary market for mortgages. It provides financing for the housing market by buying mortgages on the secondary market, pooling them and selling them as mortgage-backed securities (MBS) to investors. The fall in U.S. house prices from their peak in 2006 and the subprime mortgage crisis that followed put Freddie Mac and fellow GSE Fannie Mae under severe strain. Freddie Mac reported losses of $25.2 billion in the last quarter of 2008. In September 2008 Freddie Mac and Fannie Mae were taken over by the U.S. government. They operate under a legal status known as conservatorship that ensures their mortgage losses do not cripple their ability to support housing. As of May 2009 Freddie Mac had drawn down $51.7 billion of the $200 billion support package arranged by the U.S. government.

See also: http://www.freddiemac.com/