Fannie May & Freddie Mac ?

Question

What is the difference between Freddie Mac and Fannie Mae ? Do they both deal in the same mortgage secuirties or is there an actual difference between the two of entities.

Answer 1

Both Freddie Mac and Fannie Mae buy loans.  I have place loans with both.  

They are competitors. One may have a loan product that the other does not offer. They can have differences in underwriting requirements and in pricing.

Answer 2

Fannie Mae operates like a

national saving and loan

institution.  It gives local banks

low-interest loans.  Why?

The goal is to help the home

buyer.

Fannie Mae is backed by the

government, but isn't an agent

of it.

Freddie Mac buys mortgages,

and sells them as mortgage

securities.  This action

increases the money available

for mortgages.  It, too, is backed

by the government, but not an

agent of it.