Freddie Mac 2008 Annual Report Download - page 38

Pending Bankruptcy Legislation
In January 2009, legislation was introduced into Congress that is intended to stem the rate of foreclosures by allowing
bankruptcy judges to modify the terms of mortgages on principal residences for borrowers in Chapter 13 bankruptcy. Among
other things, the proposed legislation would allow judges to adjust interest rates, extend repayment terms and lower the
outstanding principal amount to the current estimated fair value of the underlying property. See “RISK FACTORS — Legal
and Regulatory Risks” for information on the impact this proposed legislation may have on us.
Forward-Looking Statements
We regularly communicate information concerning our business activities to investors, securities analysts, the news
media and others as part of our normal operations. Some of these communications, including this Form 10-K, contain
“forward-looking statements” pertaining to the conservatorship and our current expectations and objectives for internal
control remediation efforts, future business plans, capital management, economic and market conditions and trends, market
share, credit losses, and results of operations and financial condition on a GAAP, Segment Earnings and fair value basis.
Forward-looking statements are often accompanied by, and identified with, terms such as “objective,” “expect,” “trend,”
“forecast,” “believe,” “intend,” “could,” “future” and similar phrases. These statements are not historical facts, but rather
represent our expectations based on current information, plans, judgments, assumptions, estimates and projections. Forward-
looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control.
You should not unduly rely on our forward-looking statements. Actual results may differ materially from the expectations
expressed in the forward-looking statements we make as a result of various factors, including those factors described in the
“RISK FACTORS” section of this Form 10-K and:
• the actions FHFA, Treasury and our management may take;
• the impact of the restrictions and other terms of the conservatorship, the Purchase Agreement, the senior preferred
stock and the warrant on our business, including the adequacy of Treasury’s commitment under the Purchase
Agreement and our ability to pay the dividend on the senior preferred stock;
• changes in our charter or applicable legislative or regulatory requirements, including any restructuring or
reorganization in the form of our company, including whether we will remain a stockholder-owned company and
whether we will be placed under receivership, regulations under the Reform Act, changes to affordable housing goals
regulation, reinstatement of regulatory capital requirements or the exercise or assertion of additional regulatory or
administrative authority;
• changes in general regional, national or international economic, business or market conditions and competitive
pressures, including the success of the U.S. government’s efforts to stabilize the financial markets and changes in
employment rates and interest rates;
• changes in the U.S. residential mortgage market, including the rate of growth in total outstanding U.S. residential
mortgage debt, the size of the U.S. residential mortgage market and changes in home prices;
• our ability to effectively implement our business strategies, including our efforts to improve the supply and liquidity
of, and demand for, our products;
• our ability to recruit and retain executive officers and other key employees;
• our ability to effectively identify and manage credit, interest-rate and other risks in our business, including changes to
the credit environment and the levels and volatilities of interest rates, as well as the shape and slope of the yield
curves;
• our ability to effectively identify, assess, evaluate, manage, mitigate or remediate control deficiencies and risks,
including material weaknesses and significant deficiencies, in our internal control over financial reporting and
disclosure controls and procedures;
• incomplete or inaccurate information provided by customers and counterparties, or consolidation among, or adverse
changes in the financial condition of, our customers and counterparties;
• the risk that we may not be able to maintain the continued listing of our common and exchange-listed issues of
preferred stock on the NYSE;
• changes in our judgments, assumptions, forecasts or estimates regarding rates of growth in our business and spreads
we expect to earn;
• changes in accounting or tax standards or in our accounting policies or estimates, and our ability to effectively
implement any such changes in standards, policies or estimates;
• the availability of debt financing in sufficient quantity and at attractive rates to support growth in our mortgage-related
investments portfolio, to refinance maturing debt and to mitigate interest-rate risk;
35 Freddie Mac