Definition of "Freddie Mac"

The Federal Home Loan Mortgage Corporation (FHLMC), a publicly chartered agency that buys qualifying residential mortgages from lenders, packages them into new securities backed by those pooled mortgages, provides certain guarantees, and then resells the securities on the open market. Established in 1970, the corporation's stock is owned by savings institutions across the U.S. and is held in trust by the Federal Home Loan Bank System. The corporation has created an enormous secondary market which provides more funds for mortgage lending and allows investors to buy high yielding securities backed by federal guarantees.