[Congressional Record Volume 141, Number 135 (Friday, August 11, 1995)]
[Senate]
[Pages S12421-S12422]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  THE 25TH ANNIVERSARY OF FREDDIE MAC

 Mr. MACK. Mr. President, I am pleased to commemorate the 25th 
anniversary of what can only be described as a truly outstanding 
congressional success story. On July 24, 1970, Congress took a bold and 
innovative approach to helping millions of families across this Nation 
achieve the American dream of home ownership by creating the Federal 
Home Loan Mortgage Corporation, better known as Freddie Mac.
  Freddie Mac was created to address fundamental problems in our 
mortgage 

[[Page S 12422]]
markets which prevented middle-class working families from getting the 
credit essential to buying a home. There was a housing crisis in 1969 
and 1970 created when the economy was facing both high inflation and 
escalating interest rates. Despite a high demand for new houses, the 
combination of higher inflation and escalating interest rates was 
choking off credit for home building. Rising housing costs were pushing 
home ownership out of reach for hard-working American families.
  Inflation also forced many depositors to withdraw their savings from 
depository institutions in search of higher returns. Savings and 
loans--the country's major source of mortgage loans--were forced to 
reduce their mortgage lending activities.
  The housing crisis was also caused by a geological mismatch in supply 
and demand for housing funds. Since deposits in savings and loans were 
the primary source of mortgage money, faster-growing areas of the 
Nation faced shortages in mortgage credit, while slower-growing regions 
experienced excess supplies.
  Reliance on savings and loans for mortgage credit highlighted an 
inherent weakness in the housing finance market. Due to the illiquidity 
of the traditional mortgage instrument, there was no way to tap funds 
available in our Nation's capital markets. If mortgages were converted 
into securities, a major source of funds could be channeled to meet the 
needs of new home owners.
  Twenty-five years ago, Congress concluded that the best way to ensure 
a continuous and reliable source of mortgage credit was to develop an 
efficient and liquid nationwide secondary mortgage market. The Freddie 
Mac Act, as it became known, established a company solely dedicated to 
fulfilling this mission.
  Mr. President, Freddie Mac has worked hard to fulfill that mission 
every day for the past 25 years. Over that time, Freddie Mac has 
purchased over $1.2 trillion in mortgage loans helping 16 million 
families by financing 1 in every 6 American homes. By every measure, 
Freddie Mac is a great success. I am sure that my colleagues in 
Congress and the American people join me in expressing our appreciation 
and congratulations to Freddie Mac on its 25th anniversary.


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