Freddie Mac Stops Buying Subprime Loans, Foreclosures Rise

Freddie Mac Stops Buying Subprime Loans, Foreclosures Rise

Freddie Mac, one of the largest buyers of mortgages and a government-backed entity, says it will no longer buy the most risky subprime loans. The housing crisis deepens and more subprime borrowers default. Mortgage-backed securities and credit default swaps, which all of the banks either own or pledged insurance for, are turning sour.