Freddie Mac 2012 Annual Report Download - page 377

Dollar roll transactions — Transactions whereby we enter into an agreement to sell and subsequently repurchase (or
purchase and subsequently resell) agency securities.
DSCR — Debt Service Coverage Ratio — An indicator of future credit performance for multifamily loans. The DSCR
estimates a multifamily borrower’s ability to service its mortgage obligation using the secured property’s cash flow, after
deducting non-mortgage expenses from income. The higher the DSCR, the more likely a multifamily borrower will be able
to continue servicing its mortgage obligation.
Duration — Duration is a measure of a financial instrument’s price sensitivity to changes in interest rates.
Duration gap — One of our primary interest-rate risk measures. Duration gap is a measure of the difference between the
estimated durations of our interest rate sensitive assets and liabilities. We present the duration gap of our financial
instruments in units expressed as months. A duration gap of zero implies that the change in value of our interest rate sensitive
assets from an instantaneous change in interest rates would be expected to be accompanied by an equal and offsetting change
in the value of our debt and derivatives, thus leaving the net fair value of equity unchanged.
EDCP — Executive Deferred Compensation Plan
Effective rent — The average rent actually paid by the tenant over the term of a lease.
ESPP — Employee Stock Purchase Plan
Euribor — Euro Interbank Offered Rate
EVP — Executive Vice President
Exchange Act — Securities and Exchange Act of 1934, as amended
Executive Compensation Program — Executive Management Compensation Program, as amended and restated
Fannie Mae — Federal National Mortgage Association
FASB — Financial Accounting Standards Board
FDIC — Federal Deposit Insurance Corporation
Federal Reserve — Board of Governors of the Federal Reserve System
FHA — Federal Housing Administration
FHFA — Federal Housing Finance Agency — An independent agency of the U.S. government with responsibility for
regulating Freddie Mac, Fannie Mae, and the FHLBs.
FHLB — Federal Home Loan Bank
FICO score — A credit scoring system developed by Fair, Isaac and Co. FICO scores are the most commonly used credit
scores today. FICO scores are ranked on a scale of approximately 300 to 850 points with a higher value indicating a lower
likelihood of credit default.
Fixed-rate mortgage — Refers to a mortgage originated at a specific rate of interest that remains constant over the life of
the loan. For purposes of presentation in this report and elsewhere in our reporting, we have categorized loans that have been
modified under HAMP as fixed-rate loans, notwithstanding the rate adjustment provision of HAMP.
Foreclosure alternative — A workout option pursued when a home retention action is not successful or not possible. A
foreclosure alternative is either a short sale or deed in lieu of foreclosure.
Foreclosure transfer — Refers to our completion of a transaction provided for by the foreclosure laws of the applicable
state, in which a delinquent borrower’s ownership interest in a mortgaged property is terminated and title to the property is
transferred to us or to a third party. State foreclosure laws commonly refer to such transactions as foreclosure sales, sheriff’s
sales, or trustee’s sales, among other terms. When we, as mortgage holder, acquire a property in this manner, we pay for it by
extinguishing some or all of the mortgage debt.
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