Executive Perspectives Blog

This Memorial Day, in communities across the country, we honor the men and women of the U.S. Armed Forces for their service and sacrifice. It's a day of remembrance, and an opportunity to recognize those who have responded to the nation’s call to serve and fight for our safety and freedom.

Here at home, Freddie Mac employees are committed to our service men and women and understand that housing can be a significant issue for military families who frequently move, or for disabled veterans returning home. We work closely with our partners and the military to better serve these individuals and their families with the unique challenges they may face.

Earlier this year, our regulator, the Federal Housing Finance Agency (FHFA), issued a strategic plan for Freddie Mac and Fannie Mae. In the plan, FHFA envisioned different kinds of work for GSE single-family and multifamily businesses.

Why does multifamily have a separate and distinct role in housing our nation? There are several reasons.

Each year on April 22, more than 500 million people around the world observe Earth Day to build awareness of the Earth’s natural environment.

The first Earth Day was held in 1970 and has grown exponentially in size and significance. Today, it is widely recognized as a time for individuals, businesses, organizations, and governments to unite in a grassroots movement to encourage environmental conservation. Freddie Mac appreciates the impact that grassroots initiatives like these can have because our company's current green initiatives were born out of a grassroots movement by our employees.

With the spring homebuying season upon us, it's important to get the facts straight on home financing and credit availability. Interest rates are at historic lows today, and house prices in many markets across the country are more attractive and affordable than they have been in years. Yet many people believe that they can't take advantage of these opportunities because credit either isn't available or it's virtually impossible to qualify for a mortgage. As the head of the Single-Family Business at the nation's second largest mortgage investor, I wanted to set the record straight.

First, let me start by explaining that Freddie Mac does not make loans directly to borrowers. We operate in the secondary mortgage market: we buy mortgages from lenders, who can then use the proceeds to fund loans for other borrowers. We do, however, set the underwriting requirements for the loans that we buy. Mortgages and the borrowers' ability to repay are evaluated using several critical risk characteristics, including loan documentation standards, FICO scores, loan-to-value ratios, debt-to-income ratios, and other important factors.

There are a few questions about Freddie Mac that come up regularly here on the blog, through emails, or in our conversations with borrowers, customers, taxpayers, and others. This week, I'd like to answer three of the most-asked.

Question: It's been three and a half years since taxpayers first bailed out Freddie Mac. How much longer is this going to go on?