The Federal Housing Finance Agency inspector general has absolved Freddie Mac of allegations that it blocked mortgage refinancings, The Wall Street Journal reported Sept. 26. The IG noted that there was no evidence that Freddie blocked refinancings in an effort to increase profitability.

The investigation followed January reports from ProPublica and NPR News that accused Freddie of having a conflict of interest that prompted it to discourage mortgage refinancings — and basically bet against homeowners.

The two news outlets focused specifically on “inverse floaters,” a derivative that invests in a portion of the cash flow in a mortgage-backed security. However, at the end of 2011, those investments accounted for less than $5 billion of Freddie’s $653 billion investment portfolio, the Journal reported.

Those investments would be worth less should borrowers refinance to a lower interest rate, thus potentially creating an incentive for Freddie to discourage refinancings to protect the value of its investments.

However, the IG’s report noted that Freddie had no specific intention to block refinancings, and that it retained inverse floaters because of increased demand for other securities that were what remained when Freddie sold off other portions of its MBS holdings.