Freddie Mac 2015 Annual Report Download - page 3

Introduction About Freddie Mac | Executive Summary
Freddie Mac 2015 Form 10-K 1
INTRODUCTION
This Annual Report on Form 10-K includes forward-looking statements that are based on current
expectations and are subject to significant risks and uncertainties. These forward-looking statements are
made as of the date of this Form 10-K. We undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date of this Form 10-K. Actual results might differ
significantly from those described in or implied by such statements due to various factors and
uncertainties, including those described in the “ABOUT FREDDIE MAC - Forward-Looking Statements”
and “RISK FACTORS” sections of this Form 10-K.
Throughout this Form 10-K, we use certain acronyms and terms that are defined in the “GLOSSARY.”
ABOUT FREDDIE MAC
Freddie Mac is a GSE chartered by Congress in 1970. Our public mission is to provide liquidity, stability,
and affordability to the U.S. housing market. We do this primarily by purchasing residential mortgage
loans originated by lenders. In most instances, we package these loans into mortgage-related securities,
which are guaranteed by us and sold in the global capital markets. We also invest in mortgage loans and
mortgage-related securities. We do not originate loans or lend money directly to consumers.
We support the U.S. housing market and the overall economy by enabling America’s families to access
mortgage loan funding at lower rates and by providing consistent liquidity to the multifamily mortgage
market, which we do primarily by providing financing for workforce housing. We have helped many
distressed borrowers keep their homes or avoid foreclosure. We are working with FHFA, our customers
and the industry to build a stronger housing finance system for the nation.
EXECUTIVE SUMMARY
CONSERVATORSHIP AND GOVERNMENT SUPPORT FOR OUR BUSINESS
Since September 2008, we have been operating in conservatorship, with FHFA acting as our
Conservator. The conservatorship and related matters significantly affect our management, business
activities, financial condition, and results of operations. Our future is uncertain, and the conservatorship
has no specified termination date. We do not know what changes may occur to our business model
during or following conservatorship, including whether we will continue to exist.
Our Purchase Agreement with Treasury and the terms of the senior preferred stock we issued to Treasury
constrain our business activities. However, we believe that the support provided by Treasury pursuant to
the Purchase Agreement currently enables us to have adequate liquidity to conduct our normal business
activities. The Purchase Agreement also requires our future profits to effectively be distributed to
Treasury, and we cannot retain capital from the earnings generated by our business operations (other
than a limited amount that will decrease to zero in 2018) or return capital to stockholders other than
Treasury. Consequently, our ability to access funds from Treasury under the Purchase Agreement is
critical to keeping us solvent and avoiding the appointment of a receiver by FHFA under statutory
mandatory receivership provisions.
For more information on the conservatorship and government support for our business, see
“Conservatorship and Related Matters” and Note 2.