Freddie Mac 2009 Annual Report Download - page 199

RISK MANAGEMENT AND DISCLOSURE COMMITMENTS
In October 2000, we announced our adoption of a series of commitments designed to enhance market discipline, liquidity
and capital. In September 2005, we entered into a written agreement with FHFA that updated these commitments and set forth
a process for implementing them. A copy of the letters between us and FHFA dated September 1, 2005 constituting the written
agreement has been filed as an exhibit to our Registration Statement on Form 10, filed with the SEC on July 18, 2008, and is
available on the Investor Relations page of our website at www.freddiemac.com/investors/sec — filings/index.html.
In November 2008, FHFA suspended our periodic issuance of subordinated debt disclosure commitment during the term
of conservatorship and thereafter until directed otherwise. In March 2009, FHFA suspended the remaining disclosure
commitments under the September 1, 2005 agreement until further notice, except that (i) FHFA will continue to monitor our
adherence to the substance of the liquidity management and contingency planning commitment through normal supervision
activities and (ii) we will continue to provide interest rate risk and credit risk disclosures in our periodic public reports. For
the year ended December 31, 2009, our duration gap averaged zero months, PMVS-L averaged $476 million and PMVS-YC
averaged $74 million. Our 2009 monthly average duration gap, PMVS results and related disclosures are provided in our
Monthly Volume Summary reports, which are available on our website, www.freddiemac.com/investors/volsum and in
current reports on Form 8-K we file with the SEC. For disclosures concerning credit risk sensitivity, see “RISK
MANAGEMENT — Credit Risks — Portfolio Management Activities — Credit Risk Sensitivity.” We are providing our
website addresses solely for your information. Information appearing on our website is not incorporated into this Form 10-K.
SUBSEQUENT EVENT
On February 10, 2010, we announced that we will purchase substantially all single-family mortgage loans that are
120 days or more delinquent from our PCs and Structured Securities. The decision to effect these purchases was made based
on a determination that the cost of guarantee payments to the security holders will exceed the cost of holding non-
performing loans on our consolidated balance sheets. The cost of holding non-performing loans on our consolidated balance
sheets was significantly affected by the required adoption of new amendments to accounting standards and changing
economics. Due to our January 1, 2010 adoption of new accounting standards for transfers of financial assets and the
consolidation of VIEs, the cost of purchasing most delinquent loans from PCs will be less than the cost of continued
guarantee payments to security holders. We will continue to review the economics of purchasing loans 120 days or more
delinquent in the future and we may reevaluate our delinquent loan purchase practices and alter them if circumstances
warrant.
196 Freddie Mac