Freddie Mac 2005 Annual Report Download - page 4

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These and other steps underscore our capacity and commitment to help protect
homeowners, the housing sector and the economy from the shock of unexpected events.
They demonstrate once again how we serve our congressional charter both in good times
and in times of crisis.
While the year brought reason for pride, it also brought some disappointment. None of us
was satisfied with the company’s progress in financial reporting, where we met some of our
targets, but fell short of others. This is an area in which we are accelerating our efforts this
year, as we focus on a number of internal controls and infrastructure upgrades.
In this and many other ways, Freddie Mac’s transformation continues. Let me detail some of
the progress we have made:
Strong Business Performance
Even in the face of a challenging financial environment and a competitive secondary market,
our business remained strong in 2005.
Freddie Mac’s portfolio of issued mortgage securities grew by 10.5 percent and our
retained portfolio grew by 8.7 percent. In a robust mortgage market, these were both
significant improvements over 2004. Together, they brought our growth almost in line with
that of the overall mortgage market. We achieved this healthy growth by executing on our
underlying franchise strengths of excellent credit and interest-rate risk management and low
debt funding costs.
We met the market’s changing needs by improving our ability to purchase non-traditional
mortgage products and making core improvements in our business operations. We also
took major steps forward in such areas as customer satisfaction and market share.
Our focus on the customer continued to bear fruit. For instance, we cut in half the time
it took to get a customer contract. We also expanded our mortgage product line and
launched new types of securities (such as the Reference REMIC and whole-loan REMICs).
Foreign investors were particularly attracted to these securities — thus continuing our
“insourcing” of low-cost global funds to support the U.S. housing market.
A MESSAGE FROM THE CHAIRMAN