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McLean, Virginia. At all relevant times, petitioner was a
corporation managed by a board of directors.
Petitioner was chartered by Congress on July 24, 1970, by
title III (Federal Home Loan Mortgage Corporation Act) of the
Emergency Home Financing Act of 1970, Pub. L. 91-355, 84 Stat.
450. Petitioner was established to purchase residential
mortgages and to develop and maintain a secondary market in
conventional mortgages. A “conventional mortgage” is a mortgage
that is not guaranteed or insured by a Federal agency. The
“primary mortgage market” is composed of transactions between
mortgage originators (lenders, such as savings and loan
organizations) and homeowners or builders (borrowers). The
“secondary market” generally consists of sales of mortgages by
originators, and purchases and sales of mortgages and mortgage-
related securities by institutional dealers and investors. Since
its incorporation, petitioner has facilitated investment by the
capital markets in single-family and multifamily residential
mortgages. In the course of its business, petitioner acquires
residential mortgages from loan originators. Petitioner’s
business is a high-volume, narrow-margin business.
A. Multifamily Mortgage Program
A multifamily mortgage loan is a loan secured on a property
consisting of an apartment building with more than four
residences. Petitioner offered originators two programs for
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