FMCC is exploding on the OTC!
Freddie Mac (OTC: FMCC) has been making a highly explosive move up in recent days from its $0.30 base. The moves comes as Fannie Mae (OTC: FNMA) also has exploded!
Freddie Mac engages in providing credit guarantee for residential mortgages originated by mortgage lenders, and investing in mortgage loans and mortgage-related securities. The company also aggregates and resecuritizes mortgage-related securities that are issued by the company, other government sponsored enterprises, state or local housing finance agencies (HFAs), or private (non-agency) entities; and issues other single-class and multiclass mortgage-related securities to third-party investors.
The company also enters into certain other guarantee commitments for mortgage loans, HFA bonds under the HFA initiative, and multifamily housing revenue bonds held by third parties. Segments The company operates through three segments: Single-Family Guarantee, Investments, and Multifamily. Single-Family Guarantee This segment includes single-family credit guarantee activities. This segment purchases single-family mortgage loans originated by the company’s seller/servicers in the primary mortgage market. In various instances, the company uses the mortgage securitization process to package the purchased mortgage loans into guaranteed mortgage-related securities.
FMCC went down along with FNMA during the housing collapse and subsequent mortgage scandal. Basically what happened is that they starting giving homebuyers credit to anyone that wanted it and then repackaging that debt into securities which were then market triple A; the biggest rating for debt based securities. Of course the underlying loans were not triple A, in fact they were garbage and in the end that come back to bite them in the ass, predictably and everything completely collapsed.
Play the run here but be careful!
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