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Simple English definitions for legal terms
Federal Home Loan Bank Board
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A quick definition of Federal Home Loan Bank Board:
The Federal Home Loan Bank Board, also known as the Federal Housing Finance Board, is an organization that oversees the Federal Home Loan Banks. These banks provide funding for home mortgages and other housing-related projects. The board ensures that these banks operate in a safe and sound manner and comply with regulations.
The Federal Home Loan Mortgage Corporation, also known as Freddie Mac, is a company that buys mortgages from banks and other lenders. This helps to provide more money for banks to lend to homebuyers. Freddie Mac buys both conventional and federally insured mortgages.
A more thorough explanation:
Definition: The Federal Home Loan Bank Board is an organization that oversees the Federal Home Loan Banks and the savings and loan associations that are members of the Federal Home Loan Bank System. It was replaced by the Federal Housing Finance Board in 1989.
Definition: The Federal Home Loan Mortgage Corporation, also known as Freddie Mac, is a corporation that buys mortgages from banks and other lenders. These mortgages can be either conventional or federally insured. Freddie Mac then packages these mortgages into securities and sells them to investors.
Example: A bank lends money to a person to buy a house. The bank then sells the mortgage to Freddie Mac. Freddie Mac bundles the mortgage with other mortgages and sells them to investors. The investors receive payments from the homeowners, and Freddie Mac takes a fee for managing the mortgages.
This example illustrates how Freddie Mac works as an intermediary between banks and investors, making it easier for banks to lend money and for investors to invest in mortgages.