Freddie Mac 2010 Annual Report Download - page 332

and “NOTE 13: FREDDIE MAC STOCKHOLDERS’ EQUITY (DEFICIT),” no transactions outside of normal business
activities have occurred between us and the U.S. government since the beginning of 2010.
FHFA, as conservator, approved the Purchase Agreement and our administrative role in the MHA Program and the
Memorandum of Understanding with Treasury, FHFA, and Fannie Mae (see “NOTE 3: CONSERVATORSHIP AND
RELATED MATTERS — Housing Finance Agency Initiative”). The remaining transactions described in the sections
referenced above did not require review and approval under any of our policies and procedures relating to transactions with
related persons.
In addition, we are deemed related parties with Fannie Mae as both we and Fannie Mae have the same relationships
with FHFA and Treasury. All transactions between us and Fannie Mae have occurred in the normal course of business.
Transactions with Institutions Related to Directors
In the ordinary course of business, we were a party during 2010, and expect to continue to be a party during 2011, to
certain business transactions with institutions affiliated with members of our Board. Management believes that the terms and
conditions of the transactions were no more and no less favorable to us than the terms of similar transactions with
unaffiliated institutions to which we are, or expect to be, a party. The only such transaction that is required to be disclosed
under SEC rules is described below.
Mr. Williams joined our Board in December 2008. In January of 2010, he was appointed Executive Director of the
Government Practice at CEB. CEB provides best practices research and analysis and executive education to corporations
through memberships in various subject-matter interest groups organized and managed by CEB. Mr. Williams’
responsibilities at CEB include contributing to and authoring literature; advising on the development of CEB’s state and local
government service strategy and its existing federal government service offerings; and promoting future CEB services. We
purchased memberships in certain membership groups, and paid CEB $515,700 and $347,300 for those memberships, in
2010 and 2011 year-to-date, respectively.
This transaction was not required to be reviewed, approved or ratified under our Related Person Transactions Policy
because the Board concluded that our business relationship with CEB did not constitute a material relationship between
Mr. Williams and us that would impair Mr. Williams’ independence as our director.
Transactions with Institutions Related to Executive Officers
Mr. Renzi joined us in April 2010 as our Executive Vice President — Single Family Portfolio Management. Prior to
that, he served as the Chief Operating Officer of GMAC Residential Capital and as President of GMAC Mortgage
Corporation. That employment ended in March 2010.
GMAC Residential Capital, LLC, GMAC Mortgage Corporation, GMAC Mortgage, LLC, and Residential Funding
Company, LLC are all affiliated entities, and are now reorganized as subsidiaries of Ally Financial Inc., or Ally.
GMAC Mortgage, LLC, is a seller/servicer that sold mortgages to Freddie Mac with an aggregate unpaid principal
balance of approximately $15.7 billion in 2010, and mortgages with an aggregate unpaid principal balance of approximately
$2.9 billion through February 10, 2011.
GMAC Mortgage, LLC and Residential Funding Company, LLC (indirect subsidiaries of Ally) are seller/servicers that
together serviced and subserviced for an affiliated entity approximately 3% of the single-family loans in our single-family
credit guarantee portfolio as of December 31, 2010. In 2011, these entities continue to service and subservice our single-
family loans in our single-family credit guarantee portfolio, and we expect that selling and servicing relationship to continue
for full year 2011.
In addition, in March 2010, we entered into an agreement with GMAC Mortgage, LLC and Residential Funding
Company, LLC under which they made a one-time payment to us for the partial release of repurchase obligations relating to
loans sold to us prior to January 1, 2009. The partial release does not affect any of GMAC’s potential repurchase obligations
for loans sold to us by GMAC after January 1, 2009.
Mr. Renzi’s relationship with these entities included the following:
• Mr. Renzi’s 2010 performance metrics for his role as Chief Operating Officer at GMAC Residential Capital, upon
which his 2010 year end performance assessment would have been based, included maintaining superior servicing
performance in its relationship with each of Freddie Mac, Fannie Mae, and HUD. Because Mr. Renzi left that
employment in March 2010 (prior to his affiliation with us), he did not receive any bonus payments based on this
performance metric.
• At the time Mr. Renzi joined us, he was entitled to payments from Ally consisting of unpaid deferred stock units
granted during his employment. At that time, the remaining payments had an aggregate grant date value of
329 Freddie Mac