Freddie Mac 2009 Annual Report Download - page 184

Guaranteed PCs and Structured Securities
Guaranteed PCs and Structured Securities represent the unpaid principal balances of the mortgage-related securities we
issue or mortgages we otherwise guarantee. We create Structured Securities primarily by resecuritizing our PCs or previously
issued Structured Securities. We do not charge a management and guarantee fee for Structured Securities backed by our PCs
or previously issued Structured Securities, because the underlying collateral is already guaranteed, so there is no incremental
credit risk to us as a result of resecuritization. We also issue Structured Securities to third parties in exchange for non-
Freddie Mac mortgage-related securities, which we refer to as Structured Transactions. See “BUSINESS — Our Business
and Statutory Mission — Our Business Segments — Single-Family Guarantee Segment” and “RISK MANAGEMENT —
Credit Risks — Mortgage Credit Risk” for information on our PCs and Structured Securities, including Structured
Transactions.
We provide long-term stand-by commitments to certain of our customers, which obligate us to purchase delinquent
loans that are covered by those agreements. These financial guarantees of non-securitized mortgage loans totaled $5.1 billion
and $10.6 billion at December 31, 2009 and 2008, respectively. Under these commitments, we purchase loans from lenders
when the loans subject to these commitments meet certain delinquency criteria. We terminated $5.7 billion and $19.9 billion
of our previously issued long-term stand-by commitments in 2009 and 2008, respectively. The majority of the loans
previously covered by these commitments were subsequently securitized as PCs or Structured Securities. We include other
financial guarantees of both multifamily and single-family mortgages, including long-term stand-by commitments, in the
reported activity and balances of our guaranteed PCs and Structured Securities and total mortgage portfolio. See “NOTE 3:
FINANCIAL GUARANTEES AND MORTGAGE SECURITIZATIONS” to our consolidated financial statements for further
information about other mortgage-related guarantees.
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