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) — Q2 2012 Earnings Presentation
32 slides from Freddie Mac's earnings presentation, Aug 7, 2012
Slide 1: Second Quarter 2012 Financial Results Supplement
Second Quarter 2012 Financial Results Supplement
Slide 2: Table of contents
Table of contents ‘3 Quarterly Net income and Comprehensive Income (Loss) 4 Comprehensive Income (Loss) '5~ Treasury Draw Requests and Dividend Payments. 11 Single-Family Refinance Activity 12. Single Family Loan Workouts 413. Single Family Loan Modifications 414. Performance of Single-Family Modifi
Slide 3: Quarterly net income and comprehensive income (loss)
3 Quarterly net income and comprehensive income (loss) Line 2: Provision for credit losses decreased in 2Q 2012 primarily due to lower estimated future losses due to the positive impact of an increase in national home prices. Line 15: The shift from total other comprehensive income in 1Q 2012 to tot
Slide 4: Comprehensive income (loss)
4 Comprehensive income (loss) 1 1 Consists of the after-tax changes in: (a) the unrealized gains and losses on available-for-sale securities; (b) the effective portion of derivatives previously accounted for as cash flow hedges; and (c) defined benefit plans. A B C = A + B
Slide 5: Treasury draw requests and dividend payments
5 Treasury draw requests and dividend payments 1 Includes the initial liquidation preference of Freddie Mac’s 10% senior preferred stock of $1.0 billion. 2 Consists of requested Treasury draws of $44.6 billion for 2008 and the initial liquidation preference of Freddie Mac’s 10% senior preferred stoc
Slide 6: Total equity (deficit) and Senior Preferred Stock activity
6 Total equity (deficit) and Senior Preferred Stock activity
Slide 7: Total other comprehensive income (loss)
7 Total other comprehensive income (loss)1 1 Total other comprehensive income (loss) for the quarter represents the change in Total AOCI, net of taxes, on the company’s consolidated balance sheets. 2 At March 31, 2012 and June 30, 2012, all available-for-sale securities were mortgage-related securit
Slide 8: Loan loss reserves
8 Loan loss reserves 1 1 3 1 Consists of the allowance for loan losses and the reserve for guarantee losses. 2 Includes amounts related to certain loans purchased under financial guarantees and reflected within other expenses on the company’s consolidated statements of comprehensive income. 3 Total
Slide 9: Real estate owned
9 Real estate owned1 Property Inventory 2Q 2012 Activity Geographic Distribution2 Based on Property Inventory Historical Trend Ending Property Inventory 1 Includes single-family and multifamily REO. Multifamily ending property inventory was 16 properties as of March 31, 2012 and 11 properties as of
Slide 10: Market liquidity provided
10 Market liquidity provided Number of Families Freddie Mac Helped to Own or Rent a Home1 In Thousands Purchase and Issuance Volume2 (Single-Family and Multifamily) $ Billions For the periods presented, a borrower may be counted more than once if the company purchased more than one loan (purchase or
Slide 11: Single-family refinance activity
Relief Refinance - LTV > 105% (HARP) 11 Single-family refinance activity1 Number of Borrowers2 In Thousands $ Volume In Billions Non-Relief Refinance Relief Refinance - LTV ^ 80% Relief Refinance - LTV > 80% to 105% (HARP) $380 $306 $250 1,764 1,480 1,193 Consists of all single-family refinance mort
Slide 12: Single-family loan workouts
12 Loan modifications Forbearance agreements Short sales and deed-in-lieu of foreclosure transactions Single-family loan workouts Home Retention Actions 1 Foreclosure Alternatives 1 Repayment plans 54 48 133 275 44 208 40 81 41 1 These categories are not mutually exclusive and a borrower in one cate
Slide 13: Single-family loan modifications
13 Single-family loan modifications 1 Includes completed loan modifications under HAMP and under the company’s other modification programs. Excludes those loan modification activities for which the borrower has started the required process, but the modification has not been made permanent or effecti
Slide 14: Performance of single-family modified loans
14 Quarterly Percentages of Modified Single-Family Loans (HAMP and non-HAMP) 1 Performance of single-family modified loans Of the loans modified in 2Q 2010, 65% were current and performing 24 to 26 months post modification. Of the loans modified in 1Q 2012, 85% were current and performing 3 to 5 mon
Slide 15: Outstanding repurchase requests
15 The UPB of outstanding repurchase requests issued to our single-family seller/servicers based on breaches of representations and warranties decreased from $3.2 billion as of March 31, 2012 to $2.9 billion as of June 30, 2012.1 1 The amount the company expects to collect on outstanding requests is
Slide 16: Administrative expenses and efficiency
16 Administrative expenses and efficiency1 1 Administrative expenses, expressed as a percentage of the average total mortgage portfolio. Basis points for the quarters and YTD 2012 are calculated on an annualized basis.
Slide 17: Purchase Agreement portfolio limits
17 Purchase Agreement portfolio limits Indebtedness 1, 3 ($ 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 indebtedn
Slide 18: Credit Supplement
Bilis Credit Supplement
Slide 19: National home prices have experienced a cumulative decline of 24% since June 2006
19 National home prices have experienced a cumulative decline of 24% since June 20061 1 National home prices use the Freddie Mac House Price Index for the U.S., which is a value-weighted average of the state indexes where the value weights are based on Freddie Mac’s single-family credit guarantee po
Slide 20: Home Price Performance By State June 2006 to June 2012
Home Price Performance By State June 2006 to June 20121 -12% 1% ^ 0% -11 to -1% ^-24% -23 to -12% United States -24% -9% -46% -43% -6% CT -21% DC 2% -24% -44% -30% -19% 0% -26% -25% -9% -4% -3% -2% -18% -24% -16% -30% -22% -15% -7% -5% -11% 25% -3% -24% -16% -60% -14% -17% 2% -24% -10% RI -32% -11%
Slide 21: Mortgage market and Freddie Mac serious delinquency rates
21 1 Source: National Delinquency Survey from the Mortgage Bankers Association. Categories represent first lien single-family loans. Data is not yet available for the second quarter of 2012. 2 See “MD&A - RISK MANAGEMENT - Credit Risk - Mortgage Credit Risk - Single-Family Mortgage Credit Risk - Cre
Slide 22: Loan purpose of single-family credit guarantee portfolio purchases
22 81% 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 (HARP). Under the program, the company allows eligible borrowers who have mortgages with high current LTV rati
Slide 23: Credit quality of single-family credit guarantee portfolio purchases
23 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 exclude mortgage loans acquired under the Freddie Mac Relief R
Slide 24: Single-family 2Q 2012 credit losses and REO by region and state
24 Single-family 2Q 2012 credit losses and REO by region and state 1 Based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio at June 30, 2012. 2 UPB amounts exclude Other Guarantee Transactions with ending balances of $590 million since these securities are backed
Slide 25: Single-family credit guarantee portfolio characteristics
25 Single-family credit guarantee portfolio characteristics1 1 Portfolio characteristics are based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio. Approximately $1 billion in UPB for Other Guarantee Transactions is included in total UPB and percentage seriously
Slide 26: Single-family credit profile by book year and product feature
26 Single-family credit profile by book year and product feature1 1 Portfolio characteristics are based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio. Approximately $1 billion in UPB for Other Guarantee Transactions is included in total UPB and percentage seri
Slide 27: Single-family cumulative foreclosure transfer and short sale rates by book year
27 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
Slide 28: Multifamily portfolio composition
28 Total Multifamily (MF) Portfolio Multifamily portfolio composition
Slide 29: Multifamily mortgage portfolio by attribute
29 Multifamily mortgage portfolio by attribute1 1 Based on the 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 the process of foreclosure. 3 Based on either: (a) the year of acquisition, for loans recor
Slide 30: Multifamily mortgage portfolio by attribute, continued
30 Multifamily mortgage portfolio by attribute, continued1 1 Based on the 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 the process of foreclosure. 3 DSCR - Debt Service Coverage Ratio - is an indicat
Slide 31: Multifamily market and Freddie Mac delinquency rates
0.19% Multifamily market and Freddie Mac delinquency rates Percent 1 See “MD&A - RISK MANAGEMENT - Credit Risk - Mortgage Credit Risk - Multifamily Mortgage Credit Risk “ in Freddie Mac’s Form 10-K for the year ended December 31, 2011, for information about the company’s reported multifamily delinqu
Slide 32: Safe Harbor Statements
32 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 instrum