Freddie Mac 2010 Annual Report Download - page 41

• our ability to effectively implement our business strategies, including our efforts to improve the supply and liquidity
of, and demand for, our products;
• our ability to recruit and retain executive officers and other key employees;
• our ability to effectively identify and manage credit, interest-rate, operational, and other risks in our business,
including changes to the credit environment and the levels and volatilities of interest rates, as well as the shape and
slope of the yield curves;
• the effects of internal control deficiencies and our ability to effectively identify, assess, evaluate, manage, mitigate, or
remediate control deficiencies and risks, including material weaknesses and significant deficiencies, in our internal
control over financial reporting and disclosure controls and procedures;
• incomplete or inaccurate information provided by customers and counterparties;
• consolidation among, or adverse changes in the financial condition of, our customers and counterparties;
• the failure of our customers and counterparties to fulfill their obligations to us, including the failure of seller/servicers
to meet their obligations to repurchase loans sold to us in breach of their representations and warranties;
• changes in our judgments, assumptions, forecasts, or estimates regarding the volume of our business and spreads we
expect to earn;
• the availability of options, interest-rate and currency swaps, and other derivative financial instruments of the types and
quantities, on acceptable terms, and with acceptable counterparties needed for investment funding and risk
management purposes;
• changes in pricing, valuation or other methodologies, models, assumptions, judgments, estimates and/or other
measurement techniques, or their respective reliability;
• changes in mortgage-to-debt OAS;
• the potential impact on the market for our securities resulting from any future sales by the Federal Reserve or
Treasury of Freddie Mac debt and mortgage-related securities they have purchased;
• adverse judgments or settlements in connection with legal proceedings, governmental investigations, and IRS
examinations;
• volatility of reported results due to changes in the fair value of certain instruments or assets;
• the development of different types of mortgage servicing structures and servicing compensation;
• preferences of originators in selling into the secondary mortgage market;
• changes to our underwriting requirements or investment standards for mortgage-related products;
• investor preferences for mortgage loans and mortgage-related and debt securities compared to other investments;
• borrower preferences for fixed-rate mortgages or adjustable-rate mortgages;
• the occurrence of a major natural or other disaster in geographic areas in which our offices or portions of our total
mortgage portfolio are concentrated;
• other factors and assumptions described in this Form 10-K, including in the “MD&A” section;
• our assumptions and estimates regarding the foregoing and our ability to anticipate the foregoing factors and their
impacts; and
• market reactions to the foregoing.
We undertake no obligation to update any forward-looking statements we make to reflect events or circumstances
occurring after the date of this Form 10-K.
ITEM 1A. RISK FACTORS
Before you invest in our securities, you should know that making such an investment involves risks, including the risks
described below and in “BUSINESS,” “MD&A,” and elsewhere in this Form 10-K. These risks and uncertainties could,
directly or indirectly, adversely affect our business, financial condition, results of operations, cash flows, strategies and/or
prospects.
Conservatorship and Related Matters
The future status and role of Freddie Mac could be materially adversely affected by legislative and regulatory action that
alters the ownership, structure and mission of the company.
Future legislation will likely materially affect the role of the company, our business model, our structure and future
results of operations. Some or all of our functions could be transferred to other institutions, and we could cease to exist as a
stockholder-owned company or at all. If any of these events were to occur, our shares could further diminish in value, or
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