Two years after significant developments in the mortgage market, the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, was established. This initiative aimed to introduce competition within the secondary mortgage market. By doing so, it was intended to enhance the liquidity of mortgages and provide a broader range of options for lenders and borrowers alike.

Freddie Mac's introduction was meant to lower mortgage rates by promoting competition among financial institutions. In theory, by expanding the secondary market for mortgages, it would create a more efficient and accessible housing finance system, benefiting consumers and potentially stimulating the housing market.