Freddie Mac 2015 Annual Report Download - page 397

Glossary
Freddie Mac 2015 Form 10-K 395
Duration - Duration is a measure of a financial instrument’s price sensitivity to changes in interest rates.
Duration gap - One of our primary interest rate risk measures. Duration gap is a measure of the
difference between the estimated durations of our interest rate sensitive assets and liabilities. We present
the duration gap of our financial instruments in units expressed as months. A duration gap of zero implies
that the change in value of our interest rate sensitive assets from an instantaneous change in interest
rates would be expected to be accompanied by an equal and offsetting change in the value of our interest
rate sensitive liabilities, thus leaving economic value unchanged.
ERC - Enterprise Risk Committee
ERM - Enterprise Risk Management
EVP - Executive Vice President
Exchange Act - Securities and Exchange Act of 1934, as amended
Executive Compensation Program - Executive Management Compensation Program, as amended and
restated.
Fannie Mae - Federal National Mortgage Association
FASB - Financial Accounting Standards Board
Federal Reserve - Board of Governors of the Federal Reserve System
FHA - Federal Housing Administration
FHFA - Federal Housing Finance Agency - An independent agency of the U.S. government with
responsibility for regulating Freddie Mac, Fannie Mae, and the FHLBs.
FHLB - Federal Home Loan Bank
Fixed-rate loan - Refers to a loan originated at a specific rate of interest that remains constant over the
life of the loan. For purposes of presentation in this report, we have categorized a number of modified
loans as fixed-rate loans, even though the modified loans have rate adjustment provisions. In these
cases, while the terms of the modified loans provide for the interest rate to adjust in the future, such future
rates are determined at the time of the modification rather than at a subsequent date.
Foreclosure alternative - A workout option pursued when a home retention action is not successful or
not possible. A foreclosure alternative is either a short sale or deed in lieu of foreclosure.
Foreclosure or foreclosure transfer - Refers to our completion of a transaction provided for by the
foreclosure laws of the applicable state, in which a delinquent borrower’s ownership interest in a
mortgaged property is terminated and title to the property is transferred to us or to a third party. When we,
as loan holder, acquire a property in this manner, we pay for it by extinguishing some or all of the
mortgage debt.
Freddie Mac mortgage-related securities - Securities we issue and guarantee that are backed by
mortgages.
GAAP - Generally accepted accounting principles in the United States of America.