Freddie Mac 2015 Annual Report Download - page 218

Financial Statements Notes to the Consolidated Financial Statements | Note 2
Freddie Mac 2015 Form 10-K 216
NOTE 2: CONSERVATORSHIP AND RELATED MATTERS
BUSINESS OBJECTIVES
We operate under the conservatorship that commenced on September 6, 2008, conducting our business
under the direction of FHFA, as our Conservator. The conservatorship and related matters significantly
affect our management, business activities, financial condition and results of operations. Upon its
appointment, FHFA, as Conservator, immediately succeeded to all rights, titles, powers and privileges of
Freddie Mac, and of any stockholder, officer or director thereof, with respect to the company and its
assets. The Conservator also succeeded to the title to all books, records, and assets of Freddie Mac held
by any other legal custodian or third party. The Conservator has delegated certain authority to the Board
of Directors to oversee, and management to conduct, business operations so that the company can
continue to operate in the ordinary course. The directors serve on behalf of, and exercise authority as
directed by, the Conservator.
We are also subject to certain constraints on our business activities under the Purchase Agreement.
However, we believe that the support provided by Treasury pursuant to the Purchase Agreement currently
enables us to maintain our access to the debt markets and to have adequate liquidity to conduct our
normal business activities, although the costs of our debt funding could vary. Our ability to access funds
from Treasury under the Purchase Agreement is critical to keeping us solvent.
Our current business objectives reflect direction we have received from the Conservator (including the
Conservatorship Scorecards). At the direction of the Conservator, we have made changes to certain
business practices that are designed to provide support for the mortgage market in a manner that serves
our public mission and other non-financial objectives but may not contribute to our profitability. Certain of
these objectives are intended to help homeowners and the mortgage market and may help to mitigate
future credit losses. Some of these initiatives impact our near- and long-term financial results. Given our
public mission and the important role the Administration and our Conservator have placed on Freddie
Mac in addressing housing and mortgage market conditions, we may be required to take actions that
could have a negative impact on our business, operating results or financial condition, and thus contribute
to a need for additional draws under the Purchase Agreement.
In May 2014, FHFA issued its 2014 Strategic Plan, which updated FHFA's vision for implementing its
obligations as Conservator of Freddie Mac and Fannie Mae and established three reformulated strategic
goals. FHFA has also issued its Conservatorship Scorecards for 2014, 2015, and 2016. The
Conservatorship Scorecards establish objectives and performance targets and measures for Freddie Mac
and Fannie Mae (the “Enterprises”) related to the strategic goals set forth in the Strategic Plan.
The 2014 Strategic Plan established three reformulated strategic goals for the conservatorships of
Freddie Mac and Fannie Mae:
• Maintain, in a safe and sound manner, foreclosure prevention activities and credit availability for new
and refinanced loans to foster liquid, efficient, competitive and resilient national housing finance
markets.
• Reduce taxpayer risk through increasing the role of private capital in the mortgage market.
• Build a new single-family securitization infrastructure for use by the Enterprises and adaptable for
use by other participants in the secondary market in the future.