Bond Traders Shunning Freddie Costs Taxpayers: Mortgages

Securities it guarantees are hovering near record low prices relative to the debt of its larger rival Fannie Mae. (FNMA) That's forcing Freddie Mac to rebate lenders that package loans into its bonds to compensate them for investors paying less for the debt, according to its disclosures and people familiar with its Market-Adjusted Pricing program. Banks slice off part of homeowner payments to buy its insurance.