Transcript for Freddie Mac Investments Under Scrutiny
The agency we've was working to refinance mortgages for struggling homeowners. Was also making a profit by betting against some of those homeowners. ABC's Jim model has the story. When Freddie Mac nearly went bankrupt American taxpayers bailed them out. But when -- and Bonnie Silverstein. Like many American -- asked to refinance their Bob market 7% interest rate on their Philadelphia home the answer was no that's put us in financial jail if they could reduce that rate to 4% of the current average -- save 500 dollars a month but Freddie Mac. The government run mortgage giant that supposed to make it easier to own -- home. Won't let them -- finance it just. Flies in the face of common sense and it makes them angry because it turns out Freddie Mac is making money from homeowners like the Silverstein its. By keeping them stuck in higher interest loans. A joint investigation by national public radio and pro public -- found at Freddie Mac has invested billions of its own money. In securities that will lose money if homeowners are allowed to lower their interest rates when homeowner refinances Freddie Mac now -- legal but critics call it a clear conflict of interest. What you're doing is telling homeowners -- I'm gonna stop you from refinancing. And it's going to be profitable for my portfolio is it. Fair to say that they set the house rules and then they -- one bond trader said to us it's like. Betting on this Super Bowl and then shooting Tom Brady in the ankle. Freddie Mac says there's a wall between the people investing -- money. And the people making credit decisions. And while they won't comment on the alleged conflict the company points out. That refinancing. Makes up 80% of its business the silver stings are among the 20% still paying the higher rate though. And making Freddie Mac more money. Jim Avila ABC news New York.
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