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 2009 Earnings Presentation
26 slides from Freddie Mac's earnings presentation, Feb 24, 2010
Slide 1: Fourth Quarter 2009 Financial Results
Fourth Quarter 2009 Financial Results February 24, 2010
Slide 2: Table of contents
Biss A= aa Table of contents 3 Quarterly GAAP Financial Results 4- Full-Year GAAP Financial Results 5 Total Equity and Purchase Agreement wth Treasury 6 Business Revenues 7+ Reserve for Loan Losses: 8 Markto-Market items. 9 Adoption of SFAS 166 and 167 10. Supporting the Housing Markt in 2008 11 Fre
Slide 3: Quarterly GAAP financial results
Quarterly GAAP financial results Line 1: Net interest income continues to benefit from lower funding costs due to lower interest rates on the company's short- and long-term debt issuances. Line 3: Net mark-to-market gains were driven by increased long-term interest rates and tighter spreads on the c
Slide 4: Full-Year GAAP financial results
Full-Year GAAP financial results Line 1: Net interest income increased by $10.3 billion in 2009 primarily driven by lower funding costs and higher average balances of interest earning assets. Line 3: Net mark-to-market gains in 2009 were mainly driven by increased long-term interest rates and tighte
Slide 5: Total equity and Purchase Agreement with Treasury
Total equity and Purchase Agreement with Treasury 1 Reflects the adoption of new accounting guidance on January 1, 2009, which resulted in the classification of noncontrolling interests as part of total equity (deficit). 4Q 2008 data has been reclassified to conform to the current presentation. 2 As
Slide 6: Business revenues
$805 $867 $784 $755 $830 1.28% 1.74% 1.87% 2.05% 2.15% $600 $700 $800 $900 $1,000 $1,100 $1,200 4Q08 1Q09 2Q09 3Q09 4Q09 0.00% 0.40% 0.80% 1.20% 1.60% 2.00% 2.40% Mortgage-related investments portfolio ($ Billions) Net Interest Yield $1,827 $1,835 $1,862 $1,870 $1,851 21.9 17.4 15.8 17.6 16.2 $1,000
Slide 7: Reserve for loan losses
Reserve for loan losses $2,822 $3,872 $5,813 $10,220 $22,802 $545 $942 $863 $1,014 $1,907 $2,252 $2,421 $8,915 $5,665 $7,973 $15,618 $25,787 $33,857 $30,564 $320 $111 $6,977 $787 $1,240 $2,537 $5,702 $6,953 0.53% 1.30% 1.16% 0.81% 0.30% 0.21% 0.16% 1.69% 1.53% $0 $5,000 $10,000 $15,000 $20,000 $25,0
Slide 8: Mark-to-market items
Bnet eee A Mark-to-market items TUS wlerdeemnatdsemaiescats —arnage) gyanasagne 2680) | 7BH——SHaAY iS atS 2 Fewoncuenyeominaedaniatier as) ays) sap ame 0) aT en eee 408 497 (797) (238) 164 (404) (810) 4 None on unin se (su) ahaa ok te same 088 5 Garton ting sess a ee ee ee 6 ofr aor) tn) et) 7 taro
Slide 9: Adoption of SFAS 166 and 167
Adoption of SFAS 166 and 167 Approximate impact of change in accounting Note: For more information on the impact of the adoption of SFAS 166 and 167 see the company's Annual Report on Form 10-K for the year ended December 31, 2009.
Slide 10: Supporting the housing market in 2009
Supporting the housing market in 2009 1 Estimate based on internal Freddie Mac single-family funding volumes for 2009 divided by the gross mortgage origination amount as reported by Inside Mortgage Finance. 2 Freddie Mac's total refinancing and borrower savings amounts are for the full-year 2009, as
Slide 11: Freddie Mac refinance activity
Freddie Mac helped to refinance approximately 1.8 million borrowers in 2009 Estimated total annual borrower savings of $4.51 billion Estimated annual savings of over $2,5001 per refinanced borrower Relief Refinances under the MHA program continue to increase as a percentage of overall refinances Fre
Slide 12: Home Affordable Modification Program update
Active HAMP trial period loans Completed HAMP loan modifications During 2009, Freddie Mac implemented more than 140,000 trial and permanent HAMP modifications Estimated annual borrower savings of over $8,9004 per modified loan 1 Based on information reported by the MHA program administrator as of Ja
Slide 13: Total single-family foreclosure alternatives
Total Single-family foreclosure alternatives 1 Under this modification type, past due amounts are added to the principal balance of the original contractual loan amount. 2 Based on the number of modifications offered by the company's servicers and accepted, or acknowledged by the company and the bor
Slide 14: Credit Supplement
Freddie B Mac Dh “W444 Credit Supplement
Slide 15: National home prices cumulative decline of 18% since June 2006
National home prices have experienced a cumulative decline of 18% since June 20061 1 National home prices use the internal Freddie Mac index, which is value-weighted based on Freddie Mac's single-family portfolio. The U.S. index is a monthly series; quarterly growth rates are calculated as a 3-month
Slide 16: State home price declines December 2008 to December 2009
30 States had home price declines from December 2008 to December 20091 1 National home prices use the internal Freddie Mac index, which is value-weighted based on Freddie Mac's single-family portfolio. The state index is a monthly series; annual growth rates are calculated as a 12-month change. Sour
Slide 17: Mortgage market and Freddie Mac delinquency rates
Mortgage market and Freddie Mac delinquency rates Single-family delinquency rates as of December 31, 2009 1 Source: National Delinquency Survey from the Mortgage Bankers Association. Categories represent first lien single-family loans. 2 Excludes Structured Transactions. The total single-family deli
Slide 18: Single-family credit statistics
Single-family credit statistics1 1 Beginning in November 2008, Freddie Mac periodically suspended evictions as well as foreclosure transfers of homes occupied by borrowers eligible for certain foreclosure alternative programs, including the MHA program. These periodic suspensions create fluctuations
Slide 19: 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 Excludes Structured Securities backed by Ginnie Mae Certificates and other guarantees of HFA bonds. 3 Credit losses consist of the aggregate amount of charge-offs, net of recoveries, and the amount
Slide 20: Single-family 4Q 2009 credit losses and REO counts by region and state
Single-family 4Q 2009 credit losses & REO counts by region and state 1 Excludes Structured Securities backed by Ginnie Mae Certificates and other guarantees of HFA bonds. 2 Based on the number of mortgages 90 days or more delinquent or in foreclosure. UPB amounts exclude certain Structured Transacti
Slide 21: Single-family portfolio characteristics
Single-family portfolio characteristics1 5 4 3 1 Portfolio characteristics are based on the unpaid principal balance of the single-family mortgage portfolio excluding Structured Securities backed by Ginnie Mae Certificates, other guarantees of HFA bonds, and certain Structured Transactions for which
Slide 22: Single-family portfolio characteristics (continued)
Single-family portfolio characteristics1 4 3 1 Portfolio characteristics are based on the unpaid principal balance of the single-family mortgage portfolio excluding Structured Securities backed by Ginnie Mae Certificates, other guarantees of HFA bonds, and certain Structured Transactions for which t
Slide 23: Single-family credit profile by book year and product feature
Single-family credit profile by book year and product feature1 4 3 1 Portfolio characteristics are based on the unpaid principal balance of the single-family mortgage portfolio excluding Structured Securities backed by Ginnie Mae Certificates, other guarantees of HFA bonds, and certain Structured Tr
Slide 24: Single-family portfolio composition by product
Single-family portfolio composition by product 1 Based on the number of mortgages 90 days or more delinquent or in foreclosure. Percentage based on loan counts. 2 Total Portfolio UPB of $1,904 billion excludes HFA bonds. 3 Includes 40-year and 20-year fixed-rate mortgages. 4 Interest-only includes a
Slide 25: Single-family portfolio cumulative default rates by book year
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Yr1-Q1 Yr1-Q4 Yr2-Q3 Yr3-Q2 Yr4-Q1 Yr4-Q4 Yr5-Q3 Yr6-Q2 Yr7-Q1 Yr7-Q4 Yr8-Q3 Yr9-Q2 Yr10-Q1 Yr10-Q4 Quarter Post Origination Cumulative Default Rate 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Single-family portfolio cumulative default rates1 by book
Slide 26: 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