Freddie Mac is another name used for the Federal Home Loan Mortgage Corporation. Freddie Mac is chartered by Congress and buys mortgages from lenders to resell on the secondary mortgage market as securities. Freddie Mac was created in 1970 specifically for this purpose. The secondary mortgage market benefits both lenders and buyers as the money made on the market is used to increase the pool used for mortgage lending and also increases the total money available for buyers to make new home purchases. Freddie Mac makes money by charging a guaranteed fee on mortgages or loans that it has bought out and then pooled into security bonds which are sold on the secondary market. In recent years, Freddie Mac has joined Fannie Mae in seeking to assist low and middle income families in purchasing a home.
