Freddie Mac 2012 Annual Report Download - page 371

The amount of Mr. Layton’s and Mr. McDavid’s pension and Mr. Layton’s deferred compensation do not depend in any
way on JPMorgan Chase’s results as long as JPMorgan Chase is able to meet its obligations. In addition, in order to eliminate
any potential conflicts of interest, Mr. Layton and Mr. McDavid has each agreed to recuse himself in specified circumstances
from acting upon matters directly relating to JPMorgan Chase that may be considered by the Board of Directors, or presented
to him in his capacity as CEO and a member of the Board, or as EVP — General Counsel and Corporate Secretary,
respectively, including if such matter: i) has the potential to impact JPMorgan Chase’s ability to satisfy its obligations to him;
ii) otherwise raises an actual or potential conflict of interest; or iii) poses a significant reputation risk to the company. As a
result, neither Mr. Layton nor Mr. McDavid has a material interest in our relationship with JPMorgan Chase and their
respective relationships described above were not required to be reviewed, approved or ratified under our Related Person
Transactions Policy.
Anthony Renzi joined us in April 2010 and served as our Executive Vice President — Single Family Business,
Operations and Technology through May 2012, when his employment with Freddie Mac ended. Prior to joining Freddie Mac,
he served as the Chief Operating Officer of GMAC Residential Capital and as President of GMAC Mortgage Corporation.
That employment ended in March 2010.
GMAC Residential Capital, LLC, GMAC Mortgage Corporation, GMAC Mortgage, LLC, and Residential Funding
Company, LLC are all affiliated entities, and were reorganized as subsidiaries of Ally Financial Inc., or Ally. Residential
Capital LLC (“ResCap”) and a number of its subsidiaries, including GMAC Mortgage, LLC and Residential Funding
Company, LLC (with GMAC Mortgage, LLC, collectively, “GMAC”), filed for bankruptcy in the U.S. Bankruptcy Court for
the Southern District of New York on May 14, 2012.
GMAC Mortgage, LLC, is a seller/servicer that sold mortgages to Freddie Mac with an aggregate unpaid principal
balance of approximately $3.1 billion from January 1, 2012 through April 17, 2012. Effective April 18, 2012, mortgages
previously sold under the GMAC Mortgage, LLC purchase contract were sold to Freddie Mac under a purchase contract with
Ally Bank, a seller/servicer that is also a GMAC-affiliated entity and a subsidiary of Ally Financial. Ally Bank sold
mortgages to Freddie Mac with an aggregate unpaid principal balance of approximately $3.8 billion through December 31,
2012 and mortgages with an aggregate unpaid principal balance of approximately $345 million through January 31, 2013.
GMAC serviced (either as a servicer or a subservicer) approximately 3% of our single-family mortgage loans as of
December 31, 2012. In March 2010, we entered into an agreement with GMAC, under which GMAC made a one-time
payment to us for the partial release of repurchase obligations relating to loans sold to us prior to January 1, 2009. We
continued to purchase loans from GMAC after January 1, 2009; Ally Bank is liable for breaches of representations and
warranties with respect to these loans.
In connection with the bankruptcy filing, the bankruptcy court approved a package of servicing assurances designed to
provide comfort that GMAC will continue to maintain the existing quality of its servicing during the bankruptcy case, and
that we will have the right to transfer our loans to another servicer in the event that GMAC fails to meet certain servicing
quality criteria. The primary purpose of the bankruptcy was to effect the sale and transfer of the GMAC origination and
servicing platform, including servicing rights with respect to Freddie Mac loans, free and clear of liens and claims in an
auction sale supervised by the bankruptcy court. Ocwen Loan Servicing, LLC was the successful bidder for the servicing
rights with respect to Freddie Mac loans in an auction held on October 23, 2012. On November 21, 2012, the bankruptcy
court approved the sale to Ocwen, and the sale was completed on February 15, 2013.
At the time Mr. Renzi joined us, he was entitled to payments from Ally consisting of unpaid deferred stock units granted
during his employment. At that time, the remaining payments had an aggregate grant date value of approximately $860,000.
The aggregate amount actually paid could be either higher or lower based on Ally’s value. Payments were scheduled to be
made in cash semi-monthly and continue through March 2015.
In order to eliminate any potential conflict of interest, Mr. Renzi, in his capacity as an employee of Freddie Mac, was
recused from any transactions with or decisions relating to Ally or its affiliates through such time that he received his last
payment from Ally and its affiliates. Specifically, Mr. Renzi was recused from serving as the final decision-maker, and from
influencing final decisions, relating to: (a) any and all aspects of Freddie Mac’s relationship with Ally or its affiliates
pertaining to both performing and non-performing loan servicing; (b) any other business transactions with Ally or its
affiliates or their status as a counterparty with us; or (c) reviews of Ally or its affiliates by our MHA — Compliance function
under the Financial Agency Agreement with Treasury.
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