Freddie Mac 2010 Annual Report Download - page 342

Purchase Agreement / Senior Preferred Stock Purchase Agreement — An agreement the Conservator, acting on our
behalf, entered into with Treasury on September 7, 2008, which was subsequently amended and restated on September 26,
2008 and further amended on May 6, 2009 and December 24, 2009.
QSPE — Qualifying Special Purpose Entity — A term used within the former accounting standards on transfers and
servicing of financial assets to describe a particular trust or other legal vehicle that was demonstrably distinct from the
transferor, had significantly limited permitted activities and could only hold certain types of assets, such as passive financial
assets. Prior to January 1, 2010, the securitization trusts that were used for the administration of cash remittances received on
the underlying assets of our PCs and REMICs and Other Structured Securities were QSPEs and, as such, they were not
consolidated.
Recorded Investment — The dollar amount of a loan or security recorded on our consolidated balance sheets, excluding any
valuation allowance, such as the allowance for loan losses, but which does reflect direct write-downs of the investment. For
mortgage loans, direct write-downs consist of valuation allowances associated with recording our initial investment in loans
acquired with evidence of credit deterioration at the time of purchase.
Reform Act — The Federal Housing Finance Regulatory Reform Act of 2008, which, among other things, amended the GSE
Act by establishing a single regulator, FHFA, for Freddie Mac, Fannie Mae, and the FHLBs.
REIT — Real estate investment trust — To maintain REIT status under the Internal Revenue Code, a REIT must distribute
90% of its taxable earnings to shareholders annually. During the second quarter of 2010, our majority-owned REIT
subsidiaries were eliminated via a merger transaction.
Related Persons Transaction Policy — Written policy governing the approval of related person transactions.
Relief refinance mortgage — A single-family mortgage loan delivered to us for purchase or guarantee that meets the criteria
of the Freddie Mac Relief Refinance Mortgage
SM
initiative. This initiative is our implementation of the Home Affordable
Refinance Program for our loans. Although the Home Affordable Refinance Program is targeted at borrowers with current
LTV ratios above 80% (and up to a maximum of 125%), our initiative also allows borrowers with LTV ratios below 80% to
participate.
REMIC — Real Estate Mortgage Investment Conduit — A type of multiclass mortgage-related security that divides the cash
flows (principal and interest) of the underlying mortgage-related assets into two or more classes that meet the investment
criteria and portfolio needs of different investors.
REMICs and Other Structured Securities (or in the case of Multifamily securities, Other Structured Securities)—
Single- and multiclass securities issued by Freddie Mac that represent beneficial interests in pools of PCs and certain other
types of mortgage-related assets. REMICs and Other Structured Securities that are single-class securities pass through the
cash flows (principal and interest) on the underlying mortgage-related assets. REMICs and Other Structured Securities that
are multiclass securities divide the cash flows of the underlying mortgage-related assets into two or more classes designed to
meet the investment criteria and portfolio needs of different investors. Our principal multiclass securities qualify for tax
treatment as REMICs.
REO — Real estate owned — Real estate which we have acquired through foreclosure or through a deed in lieu of
foreclosure.
ROA — Return on assets
RSU — Restricted stock unit
S&P — Standard & Poor’s
SD — Significant deficiencies
SEC — Securities and Exchange Commission
Secondary mortgage market — A market consisting of institutions engaged in buying and selling mortgages in the form of
whole loans (i.e., mortgages that have not been securitized) and mortgage-related securities. We participate in the secondary
mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed
mortgage-related securities, principally PCs.
Senior preferred stock — The shares of Variable Liquidation Preference Senior Preferred Stock issued to Treasury under the
Purchase Agreement.
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