Freddie Sees Market Transition.

Atlantic City, NJ -- Freddie Mac has strong beliefs for the primary mortgage market, namely that it needs to be "strong, dynamic and profitable," a company executive told the Regional Conference of Mortgage Bankers Associations here.

Paul Mullings, senior vice president of single-family mortgages for the government-sponsored enterprise, said the mortgage business is in a state of transition with some lenders struggling.

Regulators are requesting the industry to tighten its standards, but housing affordability remains a problem. Freddie Mac, he said, is committed to making homeownership possible. This includes investing in education, as the growth markets, underserved borrowers, have different needs than the baby boomers.

Its education effort includes an expansion of its telenovela and an expansion of its predatory lending prevention program, "Don't Borrow Trouble."

Mr. Mullings added that Freddie Mac does not want to "invest in mortgages that will set families up for failure" as homeowners. So there is a need for higher standards for subprime loans.

As for those loans that do go into default, Mr. Mullings pointed to a survey that shows about half of those borrowers never contacted their servicer. If they had, these people would have learned about alternatives available.

Freddie Mac will be part of an Ad Council campaign to get out the message for borrowers to contact their lender to avoid foreclosure.