Frivolous
Mac Research
How Frivolous Mac was inspired by Freddie Mac
In Bailout The Game, Frivolous Mac was inspired by Freddie Mac because of the frivolous way in which they packaged mortgages together and sold them to the big banks. These purchasing banks believed the mortgages packaged into the Mortgage Backed Securities were backed by the federal government. However, when the housing market crashed and mortgages were in default, the banks required TARP funds to be bailed out of the inevitable future of bankruptcy.
The Federal Home Loan Mortgage Corporation, which is more commonly known as Freddie Mac, is a federal United States government sponsored
enterprise (GSE). Freddie Mac is headquartered in Fairfax County, Virginia.
Freddie Mac was created in 1970 to expand the secondary market for mortgages in the United States. Along with other GSE's, Freddie Mac buys
mortgages on the secondary market, pools them, and sells them as a mortgage-backed securities to investors on the open market to private investors and banks.
This secondary mortgage market helps to increase the supply of money available for mortgage lending. This practice is supposed to increase new home purchases because more money is theoretically available.
The name, "Freddie Mac", was an acronym of the company's full name that had been adopted officially for
ease of identification.
