Freddie Mac 2009 Annual Report Download - page 34

The Reform Act granted the Secretary of the Treasury authority to purchase any obligations and securities issued by us
and Fannie Mae until December 31, 2009 on such terms and conditions and in such amounts as the Secretary may determine,
provided that the Secretary determined the purchases were necessary to provide stability to the financial markets, prevent
disruptions in the availability of mortgage finance, and protect taxpayers. For information on how Treasury used this
authority, which has now expired, see “Conservatorship and Related Developments — Treasury Agreements.”
Securities and Exchange Commission
We are subject to the financial reporting requirements applicable to registrants under the Exchange Act, including the
requirement to file with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K. Although our common stock is required to be registered under the Exchange Act, we continue to be exempt from
certain federal securities law requirements, including the following:
• Securities we issue or guarantee are “exempted securities” under the Securities Act and may be sold without
registration under the Securities Act;
• We are excluded from the definitions of “government securities broker” and “government securities dealer” under the
Exchange Act;
• The Trust Indenture Act of 1939 does not apply to securities issued by us; and
• We are exempt from the Investment Company Act of 1940 and the Investment Advisers Act of 1940, as we are an
“agency, authority or instrumentality” of the U.S. for purposes of such Acts.
Legislative Developments
Congress is currently considering legislation that would overhaul the regulatory structure of the financial services
industry. On December 11, 2009, the House of Representatives passed comprehensive financial services regulatory reform
legislation, which would, among other things, create new standards related to regulatory oversight of systemically important
financial institutions, asset-backed securitization, consumer financial protection, over-the-counter derivatives and mortgage
lending. Comparable legislation has been offered, but not yet considered, in the Senate. If enacted, these proposals would
result in significant changes in the regulation of the financial services industry and would affect the business and operation
of Freddie Mac including by potentially subjecting us to new and additional regulatory oversight and standards related to our
activities, products and capital adequacy, among other areas.
In addition, a number of states have enacted laws allowing localities to create energy loan assessment programs for the
purpose of financing energy efficient home improvements. While the specific terms may vary, these laws allow for the
creation of a new lien to secure the financing that is senior to any existing Freddie Mac mortgage lien, which could have a
negative impact on Freddie Mac’s credit losses.
Various states, cities, and counties have also implemented mediation programs that could delay or otherwise change
their foreclosure processes. The programs are designed to bring servicers and borrowers together to negotiate foreclosure
alternatives; however, these actions could increase our expenses, including by potentially delaying the final resolution of
delinquent mortgage loans and the disposition of non-performing assets.
Forward-Looking Statements
We regularly communicate information concerning our business activities to investors, the news media, securities
analysts and others as part of our normal operations. Some of these communications, including this Form 10-K, contain
“forward-looking statements” pertaining to the conservatorship and our current expectations and objectives for our efforts
under the MHA Program and other programs to assist the U.S. residential mortgage market, future business plans, liquidity,
capital management, economic and market conditions and trends, market share, legislative and regulatory developments,
implementation of new accounting standards, credit losses, internal control remediation efforts, and results of operations and
financial condition on a GAAP, Segment Earnings and fair value basis. Forward-looking statements are often accompanied
by, and identified with, terms such as “objective,” “expect,” “trend,” “forecast,” “believe,” “intend,” “could,” “future” and
similar phrases. These statements are not historical facts, but rather represent our expectations based on current information,
plans, judgments, assumptions, estimates and projections. Forward-looking statements involve known and unknown risks and
uncertainties, some of which are beyond our control. You should not unduly rely on our forward-looking statements. Actual
results may differ significantly from those described in or implied by such forward-looking statements due to various factors
and uncertainties, including those factors described in the “RISK FACTORS” section of this Form 10-K and:
• the actions FHFA, Treasury, the Federal Reserve and our management may take;
• the impact of the restrictions and other terms of the conservatorship, the Purchase Agreement, the senior preferred
stock and the warrant on our business, including our ability to pay the dividend on the senior preferred stock;
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