Freddie Mac 2012 Annual Report Download - page 54

• the effects of internal control deficiencies and our ability to effectively identify, assess, evaluate, manage, mitigate, or
remediate control deficiencies and risks, including material weaknesses and significant deficiencies, in our internal
control over financial reporting and disclosure controls and procedures;
• incomplete or inaccurate information provided by customers and counterparties;
• consolidation among, or adverse changes in the financial condition of, our customers and counterparties;
• the failure of our customers and counterparties to fulfill their obligations to us, including (a) the failure of seller/
servicers to meet their obligations to repurchase loans sold to us in breach of their representations and warranties, and
the potential cost and difficulty of legally enforcing those obligations, and (b) the failure of mortgage insurers to pay
our claims in full;
• changes in our judgments, assumptions, forecasts, or estimates regarding the volume of our business and spreads we
expect to earn;
• the availability of options, interest-rate and currency swaps, and other derivative financial instruments of the types
and quantities, on acceptable terms, and with acceptable counterparties needed for investment funding and risk
management purposes;
• changes in pricing, valuation or other methodologies, models, assumptions, judgments, estimates and/or other
measurement techniques, or their respective reliability;
• changes in mortgage-to-debt OAS;
• the potential effect on the market for our securities resulting from any purchases or sales by any large investor,
including the Federal Reserve, of Freddie Mac debt or mortgage-related securities;
• adverse judgments or settlements in connection with legal proceedings, governmental investigations, and IRS
examinations;
• volatility of reported results due to changes in the fair value of certain instruments or assets;
• the development of different types of mortgage servicing structures and servicing compensation;
• preferences of originators in selling into the secondary mortgage market;
• changes to our underwriting or servicing requirements (including servicing alignment efforts under the servicing
alignment initiative), our practices with respect to the disposition of REO properties, or investment standards for
mortgage-related products;
• investor preferences for mortgage loans and mortgage-related and debt securities compared to other investments;
• borrower preferences for fixed-rate mortgages versus ARMs;
• the occurrence of a major natural or other disaster in geographic areas in which our offices or portions of our total
mortgage portfolio are concentrated;
• other factors and assumptions described in this Form 10-K, including in the “MD&A” section;
• our assumptions and estimates regarding the foregoing and our ability to anticipate the foregoing factors and their
effects; and
• market reactions to the foregoing.
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any
forward-looking statements we make to reflect events or circumstances occurring after the date of this Form 10-K.
ITEM 1A. RISK FACTORS
Investing in our securities involves risks, including the risks described below and in “BUSINESS,” “MD&A,” and
elsewhere in this Form 10-K. These risks and uncertainties could, directly or indirectly, adversely affect our business,
financial condition, results of operations, cash flows, strategies and/or prospects.
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