Freddie Mac · OTC:FMCC
Freddie Mac — Federal Home Loan Mortgage Corp (Fmcc, Fmccg, Fmcci, Fmccj, Fmccl, Fmccn, Fmcco, Fmccs, Fmcct, Fmcki, Fmckl, Fmckn, Frejn, Frejo) — Q4 2010 Earnings Presentation
31 slides from Freddie Mac's earnings presentation, Feb 24, 2011
Slide 1: Fourth Quarter 2010 Financial Results Supplement
Fourth Quarter 2010 Financial Results Supplement February 24, 2011
Slide 2: Table of contents
Table of contents Freddie B Mac ‘Quarterly GAAP Net Income (Loss) Full:vear GAAP Netincome (Loss) Total Comprehensive Income (Loss) Attributable to Freddle Mac ‘Treasury Draw Requests and Dividend Payments Total Equityand Purchase Agreement with Treasury ‘Loan Loss Reserves Total Single-Family Loan
Slide 3: Quarterly GAAP net income (loss)
Quarterly GAAP net income (loss) 2010 results are not directly comparable to prior period1 1 On January 1, 2010, the company adopted new accounting standards related to transfers of financial assets and consolidation of variable interest entities (VIEs). As these changes in accounting principles wer
Slide 4: Full-Year GAAP net income (loss)
Full-Year GAAP net income (loss) 2010 results are not directly comparable to prior period1 1 On January 1, 2010, the company adopted new accounting standards related to transfers of financial assets and consolidation of variable interest entities (VIEs). As these changes in accounting principles wer
Slide 5: Total comprehensive income (loss) attributable to Freddie Mac
Total comprehensive income (loss) attributable to Freddie Mac 1 1 AOCI is the section of the balance sheet where the company records a portion of mark-to-market changes on its available-for-sale (AFS) securities. A B C = A + B
Slide 6: Treasury draw requests and dividend payments
Treasury draw requests and dividend payments 1 Includes requested Treasury draw of $13.8 billion for 3Q 2008 and the initial liquidation preference of Freddie Mac's senior preferred stock of $1.0 billion. 2 On January 1, 2010, the company adopted accounting standards related to transfers of financia
Slide 7: Total equity and Purchase Agreement with Treasury
Total equity and Purchase Agreement with Treasury 1 On January 1, 2010, the company adopted accounting standards related to transfers of financial assets and consolidation of variable interest entities (VIEs). The cumulative effect of these changes in accounting principles was a net decrease of $11.
Slide 8: Loan loss reserves
Loan loss reserves 1 1, 3 4 1 Includes allowance for loan losses and reserve for guarantee losses. Beginning January 1, 2010, the company's reserve for guarantee losses is included in other liabilities on the consolidated balance sheets as a result of the company's adoption of the new accounting sta
Slide 9: Total single-family loan workouts
Loan modifications Forbearance agreements Short sales and deed-in-lieu transactions Total Single-family loan workouts 1 Loan modifications involve adding outstanding indebtedness, such as delinquent interest, to the unpaid principal balance of the loan or changing other terms of a mortgage. Represen
Slide 10: Reperformance rates of single-family loan modifications
Reperformance Rates of Single-family Loan Modifications (HAMP and non-HAMP) 1 Total Single-family loan modifications and reperformance rates Of the loans modified in 2Q 2009, 55% were current or less than 3 months past due 18 to 20 months post modification. Of the loans modified in 3Q 2010, 93% were
Slide 11: Repurchase requests
The UPB of loans subject to repurchase requests issued to our single-family seller/servicers declined from $4.2 billion as of December 31, 2009 to $3.8 billion as of December 31, 2010.2 During the years ended December 31, 2010 and 2009, Freddie Mac recovered amounts that covered losses with respect
Slide 12: Administrative expenses and efficiency
Administrative expenses and efficiency 1 Administrative expenses, expressed as a percentage of the average total mortgage portfolio. Basis points for the quarters are calculated on an annualized basis.
Slide 13: Purchase Agreement portfolio limits
Purchase Agreement portfolio limits1 Indebtedness 1,3 ($ Billions) Mortgage Assets 1,2 ($ Billions) 1 The company's Purchase Agreement with Treasury limits the amount of mortgage assets the company can own and indebtedness it can incur. Under the Purchase Agreement, mortgage assets and indebtedness
Slide 14: Credit Supplement
Freddi Bvisc Credit Supplement
Slide 15: National home prices cumulative decline of 24% since June 2006
National home prices have experienced a cumulative decline of 24% since June 20061 1 National home prices use the internal Freddie Mac index, which is value-weighted based on Freddie Mac's single-family credit guarantee portfolio. The U.S. index is a monthly series; quarterly growth rates are calcul
Slide 16: State home price changes December 2009 to December 2010
44 States Had Home Price Declines from December 2009 to December 2010 1.9 -6.4 -8.7 - -19.1 -4.1 - -3.3 RI -2.2 CT -3.6 DC 2.8 - -2.1 - -7.1 - -12.4 - -3.1 -1.8 - -13.7 - -4.3 -0.2 - -0.8 0.8 -1.7 - -2.1 - -1.0 3.4 - -2.5 -8.6 -8.8 - -4.0 - -5.2 3.6 -3.5 -2.7 - -2.5 - -3.2 - -7.0 -1.0 -2.6 -0.5 - -7
Slide 17: Mortgage market and Freddie Mac serious delinquency rates
1 Source: National Delinquency Survey from the Mortgage Bankers Association. Categories represent first lien single-family loans. 2 See "MD&A - RISK MANAGEMENT - Credit Risk - Mortgage Credit Risk - Credit Performance - Delinquencies" in Freddie Mac's 2010 Form 10-K for the year ended December 31, 2
Slide 18: Loan purpose of portfolio purchases
80% Loan purpose of single-family credit guarantee portfolio purchases 1 The relief refinance mortgage initiative is Freddie Mac's implementation of the Home Affordable Refinance Program. Under the program, the company allows eligible borrowers who have mortgages with high current LTV ratios to refi
Slide 19: Credit quality of portfolio purchases
Credit quality of single-family credit guarantee portfolio purchases1 Weighted Average Original LTV Ratio 2 of Single-family Mortgage Loans Purchased Weighted Average Credit Score3 of Single-family Mortgage Loans Purchased 1 Purchases in 2010 and 2009 exclude mortgage loans acquired under the Freddi
Slide 20: Credit quality of single-family guarantee portfolio outstanding
Credit quality of single-family guarantee portfolio outstanding 1 Portfolio characteristics are based on the unpaid principal balance of the single-family credit guarantee portfolio including Other Guarantee Transactions where loan characteristics data is available. 2 See "NOTE 17: SEGMENT REPORTING
Slide 21: Single-family credit statistics
Single-family credit statistics 1 Calculated as annualized credit losses divided by the average total single-family credit guarantee portfolio. 2 Consists of the unpaid principal balance of the single-family credit guarantee portfolio and the net carrying value of single-family REO balances shown on
Slide 22: Single-family credit losses by book year and state
Single-family credit losses by book year1 and state 1 Book year indicates year of loan origination. 2 Based on the unpaid principal balance of the single-family credit guarantee portfolio. 3 Consist of the aggregate amount of charge-offs, net of recoveries, and REO operations expense in each of the
Slide 23: Single-family 4Q 2010 credit losses and REO by region and state
Single-family 4Q 2010 credit losses & REO by region and state 1 Based on the unpaid principal balance of the single-family credit guarantee portfolio. 2 UPB amounts include Other Guarantee Transactions where loan characteristics data is available. 3 Based on the UPB of loans at the time of REO acqui
Slide 24: Single-family credit guarantee portfolio characteristics
Single-family credit guarantee portfolio characteristics1 1 Portfolio characteristics are based on the unpaid principal balance of the single-family credit guarantee portfolio including Other Guarantee Transactions where loan characteristics data is available. 2 Loans classified as Alt-A by the lend
Slide 25: Single-family credit guarantee portfolio characteristics, continued
Single-family credit guarantee portfolio characteristics, continued1 1 Portfolio characteristics are based on the unpaid principal balance of the single-family credit guarantee portfolio including Other Guarantee Transactions where loan characteristics data is available. 2 Loans classified as Alt-A
Slide 26: Single-family credit profile by book year and product feature
Single-family credit profile by book year and product feature1 1 Portfolio characteristics are based on the unpaid principal balance of the single-family credit guarantee portfolio including Other Guarantee Transactions where loan characteristics data is available. 2 Indicates year of loan originati
Slide 27: Single-family portfolio composition by product
Single-family credit guarantee portfolio composition by product1 1 Portfolio characteristics are based on the unpaid principal balance of the single-family credit guarantee portfolio including Other Guarantee Transactions where loan characteristics data is available. 2 Mortgage loans whose contractu
Slide 28: Cumulative foreclosure transfer and short sale rates by book year
Single-family cumulative foreclosure transfer and short sale rates1 by book year 1 Rates are calculated for each year of origination as the number of loans that have proceeded to foreclosure transfer or short sale and resulted in a credit loss, excluding any subsequent recoveries, divided by the num
Slide 29: Multifamily mortgage portfolio by attribute
Multifamily mortgage portfolio by attribute1 1 Based on unpaid principal balance (UPB) of the multifamily mortgage portfolio. 2 Based on the UPB of mortgages two monthly payments or more past due or in foreclosure. Freddie Mac revised its 2010 delinquency rates to exclude multifamily borrowers who h
Slide 30: Multifamily mortgage portfolio by attribute, continued
Multifamily mortgage portfolio by attribute, continued1 1 Based on unpaid principal balance (UPB) of the multifamily mortgage portfolio. 2 Based on the UPB of mortgages two monthly payments or more past due or in foreclosure. Freddie Mac revised its 2010 delinquency rates to exclude multifamily borr
Slide 31: Safe Harbor Statements
Safe Harbor Statements Freddie Mac obligations Freddie Mac's securities are obligations of Freddie Mac only. The securities, including any interest or return of discount on the securities, are not guaranteed by and are not debts or obligations of the United States or any federal agency or instrument