Freddie Mac was created to support which market?

Freddie Mac was created to support which market?

• A. The primary mortgage market
• B. The stock market
• C. The consumer credit market
• D. The secondary mortgage market

Answer: (D)

Freddie Mac was created to support the secondary mortgage market by increasing liquidity for home loans. It doesn’t originate loans; instead, it buys qualified mortgages from lenders and packages them into mortgage-backed securities sold to investors. This frees up capital for lenders, enabling them to issue more mortgages and expand access to funding for homebuyers. The primary mortgage market is where loans are first made, so Freddie Mac’s role is on the secondary side, not in originating new loans. The stock market deals with shares, not mortgage assets, and the consumer credit market covers broader consumer loans, not home mortgages. So the best answer is the secondary mortgage market.

Freddie Mac was created to support the secondary mortgage market by increasing liquidity for home loans. It doesn’t originate loans; instead, it buys qualified mortgages from lenders and packages them into mortgage-backed securities sold to investors. This frees up capital for lenders, enabling them to issue more mortgages and expand access to funding for homebuyers. The primary mortgage market is where loans are first made, so Freddie Mac’s role is on the secondary side, not in originating new loans. The stock market deals with shares, not mortgage assets, and the consumer credit market covers broader consumer loans, not home mortgages. So the best answer is the secondary mortgage market.