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) — Q3 2010 Earnings Presentation
27 slides from Freddie Mac's earnings presentation, Nov 3, 2010
Slide 1: Third Quarter 2010 Financial Results Supplement
Third Quarter 2010 Financial Results Supplement November 3, 2010
Slide 2: Table of contents
Table of contents Freddie A Mac 3 “ ts e t ‘Quarterly GAAP Net Income (Loss) Total Comprehensive income (Loss) Atibutable to Freddie Mac “otal Equityand Purchase Agreement with Treasury Loan Loss Reserves Agreement Potoio Limits ‘Supporting the Housing Market Freddie Mae Refinance Activity Home Affo
Slide 3: Quarterly GAAP net income (loss)
Quarterly GAAP net income (loss) Line 1: Net interest income in 3Q 2010 reflects lower funding costs and reduced mortgage-related securities amortization expense, partially offset by an unfavorable shift in asset mix as the proportion of higher-yielding mortgage-related securities declined. Line 2:
Slide 4: 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 mark-to-market changes on its available-for-sale (AFS) securities. A B C = A + B
Slide 5: 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 $11.
Slide 6: Loan loss reserves
Loan loss reserves 1 1, 3 4 1 Includes allowance for loan losses and reserve for guarantee losses. Beginning January 1, 2010, the company's reserve for guarantee losses is included in other liabilities on the consolidated balance sheets as a result of the company's adoption of the new accounting sta
Slide 7: Purchase Agreement portfolio limits
Purchase Agreement portfolio limits1 Indebtedness 1,3 ($ 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 8: Supporting the housing market
Continued to provide much needed liquidity and helped keep mortgage rates low Purchased or guaranteed approximately 1 out of every 4 home loans originated1 Purchased or guaranteed approximately $97 billion in unpaid principal balances of mortgages and mortgage-related securities during the third qua
Slide 9: Freddie Mac refinance activity
Relief Refi (CLTV 80% - 125%) Freddie Mac helped to refinance approximately 343,000 borrowers during 3Q 2010 Estimated total annual borrower savings of $6971 million Estimated annual savings of over $2,0001 per refinanced borrower Relief refinances under the MHA Program continued to increase as a pe
Slide 10: Home Affordable Modification Program update
Loans in the HAMP trial period Completed HAMP modifications As of September 30, 2010, Freddie Mac had approximately 121,000 loans for which HAMP modifications have been completed or which are in HAMP trial periods3 Estimated annual borrower savings of nearly $8,7004 per modified loan Trial period pl
Slide 11: Total single-family loan workouts
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. Represents the number of completed modifications during the quarter. Includes completed loan
Slide 12: Total single-family loan modifications and re-performance rates
Re-performance Rates of Modified Single-family Loans 1 Total Single-family loan modifications and re-performance rates Of the loans modified in 2Q 2009, 58% were current and performing 12 months post modification. Of the loans modified in 2Q 2010, 94% were current and performing 3 months post modifi
Slide 13: Credit Supplement
Freddi Bvisc Credit Supplement
Slide 14: National home prices have declined cumulatively 21% since June 2006
National home prices have experienced a cumulative decline of 21% 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 15: State by state home prices
47 states had home price declines from September 2009 to September 2010 -0.9 -7.9 -9.9 - -9.6 -2.4 - -5.0 RI -1.7 CT -2.5 DC 2.4 - -6.4 - -5.8 - -6.1 - -1.8 -2.0 - -8.3 - -3.0 -2.7 - -4.9 -1.1 -0.3 - -2.8 - -1.5 0.8 - -2.3 -3.9 -4.2 - -2.8 - -7.1 0.9 -3.8 -3.8 - -1.4 - -3.6 - -8.3 -0.6 -5.2 -0.1 - -
Slide 16: Mortgage market and Freddie Mac delinquency rates
Mortgage market and Freddie Mac delinquency rates Single-family serious delinquency rates as of June 30, 2010 1 Source: National Delinquency Survey from the Mortgage Bankers Association. Categories represent first lien single-family loans. Data is not yet available for the third quarter of 2010. 2 F
Slide 17: Single-family guarantee segment portfolio quality by book year
Single-family guarantee segment portfolio quality by book year 1 See "NOTE 16: SEGMENT REPORTING" in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 for further information regarding our segments. 2 Book year indicates year of loan origination. 3 Based on the unp
Slide 18: Single-family credit statistics
Single-family credit statistics 1 REO operations expense in 3Q 2010 primarily reflects higher property write-downs due to lower estimated REO fair values as well as higher expenses driven by increased REO inventory. 2 Calculated as annualized credit losses divided by the average total single-family
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 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 income (expense) in eac
Slide 20: Single-family 3Q 2010 credit losses and REO by region and state
Single-family 3Q 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 all Structured Transactions where loan characteristics data is available. 3 Based on the UPB of loans at the time of REO acquis
Slide 21: 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 Structured Transactions where loan characteristics data is available. 2 Loans identified as Alt-A by the lender or
Slide 22: 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 Structured Transactions where loan characteristics data is available. 2 Loans identified as Alt-A by th
Slide 23: 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 Structured Transactions where loan characteristics data is available. 2 Indicates year of loan origination. 3
Slide 24: Single-family credit guarantee portfolio composition by product
Single-family credit guarantee portfolio composition by product1 1 Based on the unpaid principal balance of the single-family credit guarantee portfolio including Structured Transactions where loan characteristics data is available. 2 Mortgage loans whose contractual terms have been modified under a
Slide 25: Single-family 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 26: Multifamily credit profile by loan attributes
Multifamily credit profile by loan attributes1 1 Based on unpaid principal balance (UPB) of the multifamily mortgage portfolio which excludes securities and guarantees backed by HFA bonds under the HFA Initiative and multifamily Structured Transactions. 2 Based on the UPB of mortgages two monthly pa
Slide 27: 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