Common term for the Federal Home Loan and Mortgage Corporation (FHLMC). Freddie Mac was created in 1970 as a publicly traded corporation to compete with Fannie Mae. These entities buy mortgage loans from originators and then securitize them to sell to investors as a certain type of mortgage-backed security (MBS) called agency MBS. Because Fannie Mae and Freddie Mac provide a guaranty of the mortgages they securitize, agency MBS are generally regarded as a more secure investment than other types of MBS. However, agency MBS are not explicitly guaranteed by the federal government. Freddie Mac also purchases MBS issued by other institutions.