Freddie Mac 2014 Annual Report Download - page 212

207 Freddie Mac
We also have issued certain REMICs and Other Structured Securities with stated final maturities that are shorter than the
stated maturity of the underlying mortgage loans. If the underlying mortgage loans to these securities have not been purchased
by a third party or fully matured as of the stated final maturity date of such securities, we will sponsor an auction of the
underlying assets. To the extent that purchase or auction proceeds are insufficient to cover unpaid principal amounts due to
investors in such REMICs and Other Structured Securities, we are obligated to fund such principal. Our maximum exposure on
these derivative guarantees represents the outstanding UPB of the REMICs and Other Structured Securities subject to stated
final maturities.
Other Indemnifications
In connection with certain business transactions, we may provide indemnification to counterparties for claims arising out
of breaches of certain obligations (e.g., those arising from representations and warranties) in contracts entered into in the
normal course of business. Our assessment is that the risk of any material loss from such a claim for indemnification is remote
and there are no significant probable and estimable losses associated with these contracts. In addition, we provided
indemnification for litigation defense costs to certain former officers who are subject to ongoing litigation. See “NOTE 17:
LEGAL CONTINGENCIES” for further information on ongoing litigation. The recognized liabilities on our consolidated
balance sheets related to indemnifications were not significant at December 31, 2014 and 2013.
As part of the guarantee arrangements pertaining to multifamily housing revenue bonds, we provided commitments to
advance funds, commonly referred to as “liquidity guarantees.” These guarantees require us to advance funds to enable others
to repurchase any tendered tax-exempt and related taxable bonds that are unable to be remarketed. Any such advances are
treated as loans and are secured by a pledge to us of the repurchased securities until the securities are remarketed. No advances
under these liquidity guarantees were outstanding at December 31, 2014 and 2013.
NOTE 15: CONCENTRATION OF CREDIT AND OTHER RISKS
Single-Family Credit Guarantee Portfolio
The table below summarizes the concentration by year of origination and geographic area of the approximately $1.7
trillion UPB of our single-family credit guarantee portfolio at both December 31, 2014 and 2013. See “NOTE 1: SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES,” "NOTE 4: MORTGAGE LOANS AND LOAN LOSS RESERVES,” and
“NOTE 7: INVESTMENTS IN SECURITIES” for more information about credit risk associated with loans and mortgage-
related securities that we hold or guarantee.
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