Profile: Federal Home Loan Mortgage Corp (FMCC.OB)


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Federal Home Loan Mortgage Corporation is engaged in the investment of mortgage loans and mortgage-related securities. The Company purchases residential mortgages originated by mortgage lenders. It packages the mortgage loans into mortgage-related securities, which are guaranteed by it and sold in the global capital markets. It does not originate mortgage loans or lend money directly to consumers. The Company operates in three segments: Single-family Guarantee, Investments and Multifamily. The Company’s Single-family Guarantee segment reflects results from the Company's single-family credit guarantee activities. The Company’s Investments segment reflects results from the Company's investment, funding and hedging activities. The Company’s Multifamily segment reflects results from the Company's investment (both purchases and sales), securitization and guarantee activities in multifamily mortgage loans and securities. The Company conducts its operations in the United States and its territories.

Single-Family Guarantee Segment

Under the Company’s Single-family Guarantee segment, it purchases and guarantees single-family mortgage loans originated by its seller or servicers in the primary mortgage market and manages its delinquent loans. The Company uses the mortgage securitization process to package the mortgage loans into guaranteed mortgage-related securities. It guarantees the payment of principal and interest on the mortgage-related securities in exchange for management and guarantee fees.

The United States residential mortgage market consists of a primary mortgage market that links homebuyers and lenders and a secondary mortgage market that links lenders and investors. The Company is involved in the secondary mortgage market. The Company purchases mortgage loans and mortgage-related securities and issues guaranteed mortgage-related securities. Under the Single-family Guarantee segment, it securitizes single-family mortgages, which are mortgages that are secured by one- to four-family properties. The Company’s customers in the Single-family Guarantee segment are lenders that originate mortgages for homeowners and sell them to it and financial institutions that service the loans for it. Its lenders include mortgage banking companies, commercial banks, community banks, credit unions, other non-depository financial institutions, housing finance agencies (HFAs) and thrift institutions.

The Company’s primary single-family mortgage securitization and guarantee process involves the issuance of single-class participation certificates (PCs), and its primary multifamily mortgage securitization and guarantee process involves the issuance of K Certificates. The Company offers mortgage-related securities that are issued by it, other Government sponsored enterprises (GSEs), HFAs, or private (non-agency) entities, and issue other single-class and multiclass mortgage-related securities to third-party investors. The types of mortgage-related securities it issues and guarantees include PCs, REMICs and Other Structured Securities and Other Guarantee Transactions. The Company also issues mortgage-related securities to third parties in exchange for non-Freddie Mac mortgage-related securities. The non-Freddie Mac mortgage-related securities are transferred to trusts that are created for the purpose of issuing securities, or certificates, in the Other Guarantee Transactions.

Investments segment

The Company’s Investments segment reflects results from three activities, which include managing its mortgage-related investments portfolio, excluding Multifamily segment investments and single-family delinquent loans; managing the treasury function for the entire company, including funding and liquidity, and managing interest-rate risk for the Company. Under its Investments segment, the Company invests in mortgage-related securities and single-family performing mortgage loans. The Company’s investment segment is focused on maintaining a presence in the agency mortgage-related securities market; maintaining a portfolio of liquid mortgage assets consistent with its liquidity management guidelines; managing the single-family performing loans obtained through its cash purchase program; managing single-family delinquent loans along with the single-family business; managing single-family reperforming loans and performing modified loans, reducing the balance of its non-agency mortgage-related securities through liquidations and sales; managing the interest-rate risk for the entire company through the use of derivatives and unsecured debt, and managing the treasury function for the Company, including funding and liquidity, through the issuance of short-term and long-term unsecured debt. The Company’s unsecured debt securities and structured mortgage-related securities are initially purchased by dealers and redistributed to their customers. The customers for its unsecured debt securities include insurance companies, money managers, central banks, depository institutions and pension funds.

Multifamily segment

Under the Company’s multifamily segment, it offers guarantees of the payment of principal and interest on tax-exempt multifamily pass-through certificates backed by multifamily housing revenue bonds. The Company guarantees the payment of principal and interest on tax-exempt multifamily housing revenue bonds secured by low and moderate income multifamily mortgage loans.

The Company competes with Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Federal Housing Administration/the United States Department of Veteran Affairs (FHA/VA) and Federal Home Loan Bank (FHLB).

Company Address

Federal Home Loan Mortgage Corp

8200 Jones Branch Drive
MCLEAN   VA   22102-3110
P: +1703.9032000
F: +1703.9032759

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