Freddie Mac 2006 Annual Report Download - page 19

Table 3 Ì Housing Goals and Home Purchase Subgoals and Reported Results(1)
Housing Goals and Reported Results
Year Ended December 31,
2006 2005 2004
Goal Result Goal Result Goal Result
Low- and moderate-income goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53% 55.9% 52% 54.1% 50% 51.6%
Underserved areas goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38 42.6 37 42.2 31 32.3
Special aÅordable goalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23 26.5 22 24.5 20 22.7
Multifamily special aÅordable volume target (dollars in billions) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3.92 $14.01 $3.92 $11.41 $2.11 $7.77
Home Purchase Subgoals and Reported Results
Year Ended December 31,
2006 2005
Subgoal Result Subgoal Result
Low- and moderate-income subgoal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 46% 46.9% 45% 46.9%
Underserved areas subgoal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33 33.7 32 35.4
Special aÅordable subgoalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17 16.9 17 17.8
(1) An individual mortgage may qualify for more than one of the goals or subgoals. Each of the goal and subgoal percentages and each of our percentage
results is determined independently and cannot be aggregated to determine a percentage of total purchases that qualiÑes for these goals or subgoals.
Meeting our aÅordable housing goals and subgoals is increasingly challenging and there can be no assurance that we will
do so. See ""RISK FACTORS Ì Legal and Regulatory Risks.'' However, we view the purchase of mortgage loans that
count toward our aÅordable housing goals to be a principal part of our mission and business and we are committed to
facilitating the Ñnancing of aÅordable housing for low- and moderate-income families.
We reported to HUD that we met our three aÅordable housing goals and the multifamily special aÅordable volume
target subgoal for 2006. With respect to the home purchase subgoals, we reported that we met the low- and moderate-
income subgoal and the underserved areas subgoal. However, our result for the special-aÅordable subgoal was 16.9 percent
as compared with the subgoal of 17.0 percent. HUD has determined that we met the goals and subgoals for 2005 and 2004,
and will evaluate our performance with respect to 2006.
We are engaged in ongoing discussions with HUD regarding interpretive issues relating to the purchase and counting of
mortgages for purposes of housing goals and subgoals performance for 2006. If the Secretary of HUD Ñnds that we failed to
meet a housing goal established under section 1332, 1333, or 1334 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992, or the GSE Act, and that achievement of the housing goal was feasible, the GSE Act states that the
Secretary shall require the submission of a housing plan with respect to the housing goal for approval by the Secretary. The
housing plan must describe the actions we would take to achieve the unmet goal in the future. HUD has the authority to
take enforcement actions against us, including issuing a cease and desist order or assessing civil money penalties, if we:
(a) fail to submit a required housing plan or fail to make a good faith eÅort to comply with a plan approved by HUD; or
(b) fail to submit certain data relating to our mortgage purchases, information or reports as required by law. See ""RISK
FACTORS Ì Legal and Regulatory Risks.'' While the GSE Act is silent, HUD has indicated that it has authority under
the GSE Act to establish and enforce a separate speciÑc subgoal within the special aÅordable housing goal.
Fair Lending
Our mortgage purchase activities are subject to federal anti-discrimination laws. In addition, the GSE Act prohibits
discriminatory practices in our mortgage purchase activities, requires us to submit data to HUD to assist in its fair lending
investigations of primary market lenders and requires us to undertake remedial actions against lenders found to have
engaged in discriminatory lending practices. In addition, HUD periodically reviews and comments on our underwriting and
appraisal guidelines for consistency with the Fair Housing Act and the GSE Act.
Predatory Lending
A core component of our mission is to facilitate the Ñnancing of aÅordable housing for low- and moderate-income
families. Predatory lending practices include the origination of loans with excessive interest rates or Ñnancing costs. Such
practices are in direct opposition to our mission, our goals and our practices. Since 2000, we have taken a number of
voluntary steps to combat predatory lending and support responsible lending. We have instituted anti-predatory lending
policies intended to prevent the purchase or assignment of mortgage loans with unacceptable terms or conditions or resulting
from unacceptable practices. In addition to the purchase policies we have instituted, we promote consumer education and
Ñnancial literacy eÅorts to help borrowers avoid abusive lending practices and we provide competitive mortgage products to
reputable mortgage originators so that borrowers have a greater choice of Ñnancing options.
7Freddie Mac