Freddie Mac 2012 Annual Report Download - page 378

Freddie Mac mortgage-related securities — Securities we issue and guarantee, including PCs, REMICs and Other
Structured Securities, and Other Guarantee Transactions.
GAAP — Generally accepted accounting principles in the United States of America.
Ginnie Mae — Government National Mortgage Association
GSE Act — The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Reform Act.
GSEs — Government sponsored enterprises — Refers to certain legal entities created by the U.S. government, including
Freddie Mac, Fannie Mae, and the FHLBs.
Guarantee fee — The fee that we receive for guaranteeing the payment of principal and interest to mortgage security
investors, which consists primarily of a combination of management and guarantee fees paid on a monthly basis, as a
percentage of the UPB underlying loans, and initial upfront payments, such as delivery fees.
Guidelines — Corporate Governance Guidelines, as revised
HAFA — Home Affordable Foreclosures Alternative program — In 2009, the Treasury Department introduced the HAFA
program to provide an option for HAMP-eligible homeowners who are unable to keep their homes. The HAFA program took
effect on April 5, 2010 and we implemented it effective August 1, 2010.
HAMP — Home Affordable Modification Program — Refers to the effort under the MHA Program whereby the
U.S. government, Freddie Mac and Fannie Mae commit funds to help eligible homeowners avoid foreclosure and keep their
homes through mortgage modifications.
HARP — Home Affordable Refinance Program — Refers to the effort under the MHA Program that seeks to help eligible
borrowers with existing loans that are guaranteed by us or Fannie Mae to refinance into loans with more affordable monthly
payments and/or fixed-rate terms without obtaining new mortgage insurance in excess of what is already in place. Originally,
only borrowers who had mortgages sold to Freddie Mac or Fannie Mae on or before May 31, 2009 with current LTV ratios
above 80% (and up to 125%) were eligible to refinance their mortgages under the program. In October 2011, HARP was
expanded to allow eligible borrowers who have mortgages with current LTV ratios above 125% to refinance under the
program. The relief refinance initiative, under which we also allow borrowers with LTV ratios of 80% and below to
participate, is our implementation of HARP for our loans.
HFA — State or local Housing Finance Agency
HFA initiative — An initiative among Treasury, FHFA, Freddie Mac, and Fannie Mae that commenced in 2009. Under the
HFA initiative, we and Fannie Mae provide assistance to state and local HFAs so that the HFAs can continue to meet their
mission of providing affordable financing for both single-family and multifamily housing. The HFA initiative includes the
NIBP and the TCLFP.
HUD — U.S. Department of Housing and Urban Development —HUD has authority over Freddie Mac with respect to fair
lending.
Implied volatility — A measurement of how the value of a financial instrument changes due to changes in the market’s
expectation of potential changes in future interest rates. A decrease in implied volatility generally increases the estimated fair
value of our mortgage assets and decreases the estimated fair value of our callable debt and options-based derivatives, while
an increase in implied volatility generally has the opposite effect.
Interest-only loan — A mortgage loan that allows the borrower to pay only interest (either fixed-rate or adjustable-rate) for
a fixed period of time before principal amortization payments are required to begin. After the end of the interest-only period,
the borrower can choose to refinance the loan, pay the principal balance in total, or begin paying the monthly scheduled
principal due on the loan.
IRS — Internal Revenue Service
K Certificates — Multifamily regularly issued, structured pass-through securities backed primarily by recently originated
multifamily mortgage loans. We categorize K Certificates that we guarantee as Other Guarantee Transactions. See “Other
Guarantee Transactions” for more information.
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