Freddie Mac 2005 Annual Report Download - page 23

respect to the goals and subgoals for 2005. Our performance with respect to the goals and subgoals, as reported to HUD, is
set forth in Table 3 below.
Table 3 Ì Housing Goals and Home Purchase Subgoals and Reported Results(1)
Housing Goals and Reported Results
Year Ended December 31,
2005 2004 2003
Goal Result Goal Result(2) Goal Result(2)
Low- and moderate-income goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52% 54.1% 50% 51.6% 50% 51.2%
Underserved areas goalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 37 42.2 31 32.3 31 32.7
Special aÅordable goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22 24.5 20 22.7 20 21.4
Multifamily special aÅordable volume target (dollars in billions)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3.92 $11.41 $2.11 $7.77 $2.11 $8.79
Home Purchase Subgoals and Reported Results
Year Ended
December 31, 2005
Subgoal Result
Low- and moderate-income subgoal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45% 46.9%
Underserved areas subgoal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32 35.4
Special aÅordable subgoal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17 17.8
(1) An individual mortgage may qualify for more than one of the goals or subgoals. Each of the goal and subgoal percentages and each of our percentage
results is determined independently and cannot be aggregated to determine a percentage of total purchases that qualiÑes for these goals or subgoals.
(2) The 2004 and 2003 results reÖected in this table have been revised from the numbers reÖected in our Information Statement dated June 14, 2005 to
reÖect adjustments and corrections to the information we originally reported to HUD for those years.
We are engaged in ongoing discussions with HUD regarding interpretive issues relating to the purchase and counting of
mortgages for purposes of housing goals performance for 2005. If the Secretary of HUD were to Ñnd that we failed, or that
there was a substantial probability that we would fail, to meet a housing goal and that achievement of the housing goal was
feasible, the Secretary could require us to submit a housing plan. The housing plan would describe the actions we would take
to achieve the goal in the future. HUD also has the authority to take enforcement actions against us, including issuing a
cease and desist order or assessing civil money penalties, if we: (a) fail to submit a required housing plan or fail to make a
good faith eÅort to comply with a plan approved by HUD; or (b) fail to submit certain data relating to our mortgage
purchases, information or reports required by law.
Fair Lending
Our mortgage purchase activities are subject to federal anti-discrimination laws. In addition, the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992, or the GSE Act, prohibits discriminatory practices in our mortgage
purchase activities, requires us to submit data to HUD to assist it in its fair lending investigations of primary market lenders,
and requires us to undertake remedial actions against lenders found to have engaged in discriminatory lending practices. In
addition, HUD periodically reviews and comments on our underwriting and appraisal guidelines for consistency with the Fair
Housing Act and the GSE Act.
Predatory Lending
A core component of our mission is to facilitate the Ñnancing of aÅordable housing for low- and moderate-income
families. Predatory lending is in direct opposition to our mission, our goals and our practices. Since 2000, we have taken a
number of voluntary steps to combat predatory lending and support responsible lending. We have instituted anti-predatory
lending policies intended to prevent the purchase or assignment of mortgage loans with unacceptable terms or conditions or
resulting from unacceptable practices. In accordance with these policies, we will not purchase:
‚ mortgages originated with single-premium credit insurance;
‚ mortgages with terms that exceed either the annual percentage rate or the points and fees threshold under the Home
Ownership and Equity Protection Act of 1994;
‚ subprime mortgages with prepayment penalty terms that exceed three years; or
‚ subprime mortgages originated on or after August 1, 2004 with mandatory arbitration clauses.
In addition to the purchase policies we have instituted, we promote consumer education and Ñnancial literacy eÅorts to help
borrowers avoid abusive lending practices and we provide competitive mortgage products to reputable mortgage originators
so that borrowers have a greater choice of Ñnancing options.
We also require our servicers to report all borrower credit information, including monthly mortgage payments. Several
states have enacted laws aimed at curbing predatory lending practices, generally with regard to loans exceeding thresholds
based on annual percentage rates or Ñnancing costs. These loans are typically referred to as ""high-cost home loans.'' The
high-cost home loan thresholds trigger state law liabilities for subsequent purchasers or assignees of such loans that may be
7Freddie Mac