Freddie Mac enters subprime lending market

Northwestern Financial Review, Oct 18, 1997

Freddie Mac is entering the subprime lending market by buying lower quality mortgage loans. At the annual meeting of the Mortgage Bankers Association, Freddie Mac Chairman Leland Brendsel said, "We will buy all the loans we can that meet our parameters and can be priced profitably.'' The company will work with individual lenders and companies that offer subprime products.

Fannie Mae will begin counseling subprime borrowers, those with B and C credit ratings, with the intent to improve their credit rating, and then buying their loans. Both companies said they are trying to make mortgages more affordable to people who have been cut out of the mainstream market.