Freddie Mac 2015 Annual Report Download - page 395

Glossary
Freddie Mac 2015 Form 10-K 393
CERO - Chief Enterprise Risk Officer
CFO - Chief Financial Officer
CFPB - Consumer Financial Protection Bureau
Charge-Offs, gross - Represent the carrying amount of a loan that has been discharged in order to
remove the loan from our consolidated balance sheet at the time of resolution, regardless of when the
impact of the credit loss was recorded on our consolidated statements of comprehensive income.
Charge-offs primarily result from foreclosure transfers and short sales and are generally calculated as the
recorded investment of a loan at the date it is discharged less the estimated value in final disposition or
actual net proceeds received in a short sale.
Charter - The Federal Home Loan Mortgage Corporation Act, as amended, 12 U.S.C. § 1451 et seq.
CMBS - Commercial mortgage-backed security - A security backed by loans on commercial property
(often including multifamily rental properties) as opposed to one-to-four family residential real estate.
Although the loan pools underlying CMBS can include loans financing multifamily properties and
commercial properties, such as office buildings and hotels, the classes of CMBS that we hold receive
distributions of scheduled cash flows only from multifamily properties. We have not identified CMBS as
either subprime or Alt-A securities.
Comprehensive income (loss) - Consists of net income (loss) plus other comprehensive income (loss).
Conforming loan/Conforming jumbo loan/Conforming loan limit - A conventional single-family loan
with an original principal balance that is equal to or less than the applicable statutory conforming loan
limit, which is a dollar amount cap on the original principal balance of single-family loans we are permitted
by law to purchase or securitize. The conforming loan limit is determined annually based on changes in
FHFA’s housing price index. Since 2006, the base conforming loan limit for a one-family residence has
been set at $417,000, and higher limits have been established in certain “high-cost” areas (currently, up to
$625,500 for a one-family residence). Higher limits also apply to two- to four-family residences, and for
loans secured by properties in Alaska, Guam, Hawaii and the U.S. Virgin Islands.
Actual high-cost area loan limits are set by FHFA for each county (or equivalent), and the loan limit for
specific high-cost areas may be lower than the maximum amounts. We refer to loans that we have
purchased with a UPB exceeding the base conforming loan limit (i.e., $417,000) as conforming jumbo
loans.
Conservator - The Federal Housing Finance Agency, acting in its capacity as Conservator of Freddie
Mac.
Convexity - A measure of how much a financial instrument’s duration changes as interest rates change.
Core single-family book - Consists of loans in our single-family credit guarantee portfolio that were
originated since 2008. We do not include relief refinance loans, including HARP loans, in this book as
underwriting procedures for relief refinance loans are limited, and, in many cases, do not include all of the
changes in underwriting standards we have implemented since 2008.
Credit enhancement - A financial arrangement that is designed to reduce credit risk by partially or fully
compensating an investor in a mortgage or security (e.g., Freddie Mac) in the event of specified losses.