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Here are 1-2 brief analogies to describe Federal Home Loan Mortgage (FMCC):

1. Like the Federal Reserve, but dedicated solely to providing liquidity and stability to the U.S. mortgage market.
2. Imagine a government-backed Goldman Sachs that *only* buys home mortgages from banks, packages them into investment securities, and sells them to global investors to keep the housing market funded.

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• Mortgage-Backed Securities (MBS): Freddie Mac creates and sells investment products, backed by pools of residential mortgages, to capital market investors.
• Mortgage Guarantees: It guarantees the timely payment of principal and interest on its MBS, reducing risk for investors.
• Mortgage Purchase Programs: Freddie Mac buys eligible mortgages from lenders, providing them with capital to make new home loans and ensure liquidity in the housing market.

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Major Customers of Federal Home Loan Mortgage (FMCC)

• Large Commercial Banks: Major financial institutions hold Freddie Mac's mortgage-backed securities as part of their investment portfolios for liquidity, regulatory requirements, and interest income. Examples of such publicly traded companies include:
  • JPMorgan Chase & Co. (Symbol: JPM)
  • Bank of America Corporation (Symbol: BAC)
  • Wells Fargo & Company (Symbol: WFC)
• Asset Management Firms: These companies manage mutual funds, pension funds, endowments, and other investment vehicles that frequently invest in fixed-income securities, including agency MBS, for their clients. Examples of such publicly traded companies include:
  • BlackRock, Inc. (Symbol: BLK)
• Insurance Companies: Life and property & casualty insurance companies invest in Freddie Mac's securities to match their long-term liabilities and generate stable investment income. Examples of such publicly traded companies include:
  • MetLife, Inc. (Symbol: MET)
  • Prudential Financial, Inc. (Symbol: PRU)

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Diana W. Reid, Chief Executive Officer and Director

Diana W. Reid was appointed Chief Executive Officer of Freddie Mac on September 10, 2024. She is a seasoned financial services executive with 40 years of experience in commercial and residential real estate lending, debt capital markets, and risk management. She founded Beekman Advisors, where she provided strategic advice and M&A execution to real estate finance company owners, CEOs, and boards. Ms. Reid spent nearly 20 years at the investment bank formerly known as Credit Suisse First Boston, working in Mortgage Trading, Debt Capital Markets, and Financial Institutions Advisory. Before her executive role at PNC Financial Services Group Inc., she retired from PNC in 2019 after 12 years as an executive in its real estate business divisions, which included debt and equity for affordable housing, multifamily lending, commercial lending to institutional real estate owners and investors, commercial loan servicing and special servicing, and real estate technology solutions.

James Whitlinger, Executive Vice President and Chief Financial Officer

James Whitlinger was appointed Executive Vice President and Chief Financial Officer in January 2025, after serving as Interim Chief Financial Officer from June 2024 to December 2024. He has been an employee of Freddie Mac for 10 years, previously holding the position of Senior Vice President, Single-Family Chief Financial Officer since 2014. Mr. Whitlinger has over 30 years of experience in the real estate finance industry, including serving as Executive Vice President and Chief Financial Officer at GMAC ResCap Inc.

Michael T. Hutchins, President

Michael T. Hutchins is the President of Freddie Mac and previously served as Interim Chief Executive Officer until September 2024. He has over 30 years of experience in the financial services industry. Mr. Hutchins co-founded and served as CEO of PrinceRidge (formerly PrinceRidge Group LLC and C&Co/PrinceRidge LLC), a financial services firm that was owned by JVB Financial Holdings LLC. Prior to founding PrinceRidge, he worked at UBS from 1996 to 2007, where he held various positions including Global Head of the Fixed Income, Rates & Currencies Group. He also worked at Salomon Brothers from 1986 to 1996, holding management positions such as Co-Head of Fixed Income Capital Markets.

Anil D. Hinduja, Executive Vice President, Chief Risk Officer and Head of ERM

Anil D. Hinduja has served as Executive Vice President and Chief Risk Officer of Freddie Mac since July 2015. Previously, he was Chief Risk Officer for Barclays Africa Group Limited, Credit Director for Retail Credit Risk, and Chief Risk Officer for Barclays' retail bank in the U.K. Before that, Mr. Hinduja held various executive positions at Citigroup, including Director for Global Consumer Credit Risk, Chief Risk Officer for the Consumer Lending Group, and ultimately as President and CEO of Citi Home Equity.

John Glessner, Executive Vice President and Head of Investments and Capital Markets

John Glessner was named Executive Vice President and Head of the Investments and Capital Markets Division in March 2024. In this role, he is responsible for overseeing liquidity, financing, credit risk transfer, and derivative activities, as well as managing Freddie Mac's portfolio of single-family securities and loan investments. He also oversees enterprise functions related to financial/capital/risk analytics, model governance, payments, counterparty risk, and third-party risk. Previously, Mr. Glessner served as Senior Vice President.

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The Federal Home Loan Mortgage Corporation (FMCC), commonly known as Freddie Mac, faces several significant risks, primarily stemming from its prolonged conservatorship and the ongoing debate about its future structure.

1. Uncertainty and Political Risk Regarding Conservatorship and Potential Privatization: The most significant risk to FMCC is the lack of a clear, long-term resolution for its status as a government-sponsored enterprise (GSE) under conservatorship. This includes the potential for dramatic policy shifts with new administrations, which could introduce significant uncertainty into the market. The debate over whether FMCC will remain under government control or be privatized, and the terms of such a transition, is a major factor. Privatization, particularly without an explicit government guarantee, could disrupt the mortgage market, potentially leading to higher mortgage rates for borrowers and a less stable housing finance system. Furthermore, exiting conservatorship could necessitate FMCC holding more capital, potentially leading to increased guarantee fees charged to lenders. While in conservatorship, the company also faces constraints on executive compensation and investment in technology, and a lack of independent shareholder oversight.
2. Financial Challenges and Debt Management: FMCC faces ongoing concerns regarding its financial health, including mixed financial metrics, uncertain profitability margins, and issues with cash flow. The company's debt is identified as a "nagging issue" that could adversely impact its stock performance if not managed effectively. Additionally, there has been an increase in credit loss provisions, reflecting growing concerns over potential defaults and delinquencies within its loan portfolio.
3. Economic and Market Volatility: Fluctuations in key economic indicators such as interest rates, mortgage spreads, and house prices, as well as broader economic conditions, pose a threat to FMCC's financial performance and market position. The company must maintain robust risk management strategies and a strong liquidity profile to navigate such market volatility.

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Federal Home Loan Mortgage Corporation (FMCC), also known as Freddie Mac, primarily operates in the U.S. secondary mortgage market. Its main products and services involve purchasing, securitizing, and guaranteeing single-family and multifamily residential mortgage loans originated by lenders. The addressable markets for these services are as follows:

U.S. Single-Family Mortgage Market

The U.S. single-family mortgage market, which includes purchase mortgages, saw significant activity. The market for purchase mortgages within the U.S. is currently valued at approximately USD 1,145.4 billion. In the first half of 2025, Americans originated USD 884 billion in new mortgage debt. Total mortgage originations in the U.S. reached USD 1.69 trillion in 2024. More broadly, the U.S. home mortgage market size was around USD 180.91 billion in 2023 and is projected to grow to about USD 204.49 billion in 2024.

U.S. Multifamily Mortgage Market

The U.S. multifamily mortgage market has also shown substantial volume. Multifamily lending in the U.S. climbed to USD 288.7 billion in 2024. Projections for 2025 indicate that multifamily origination volume is expected to be between USD 370 billion and USD 380 billion, with other estimates placing it at approximately USD 390 billion. In 2024, Fannie Mae and Freddie Mac together purchased over USD 140 billion in multifamily loans, representing 41% of the total multifamily mortgage volume by dollar amount.

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Here are 3-5 expected drivers of future revenue growth for Federal Home Loan Mortgage (FMCC) over the next 2-3 years:

1. Growth in Mortgage Portfolio and Securitization Volume: Freddie Mac's net interest income has been driven by continued growth in its single-family mortgage portfolio. Furthermore, a strategic shift in its multifamily business has led to an increased volume of fully guaranteed securitizations, contributing positively to revenue. The broader U.S. home loan market is projected to expand from USD 2.29 trillion in 2025 to USD 3.02 trillion by 2030, offering a favorable environment for portfolio expansion.
2. Increased Focus on Affordable Housing and First-Time Homebuyers: Freddie Mac is actively expanding affordable housing options and supporting first-time homebuyers. This focus aligns with a significant demographic shift, as millennials and Gen Z buyers are increasingly entering the housing market, often utilizing government-backed, low-down-payment programs, which are expected to sustain demand.
3. Recovery in Refinance Activity: After a steep drop, the refinance share of overall mortgage originations is forecasted to increase significantly, rising to 19.7% in 2025, 25.4% in 2026, and 33.4% in 2027. This anticipated recovery in refinancing could provide a substantial boost to Freddie Mac's revenue.
4. Enhancement of Digital Mortgage Tools and Process Automation: Freddie Mac plans to enhance its digital mortgage tools. This focus on technology and automation, mirroring broader industry trends, can lead to more efficient operations, reduced fulfillment costs, and potentially a greater reach to customers, supporting revenue growth.

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Federal Home Loan Mortgage (FMCC) Capital Allocation Decisions (Last 3-5 Years)

Share Repurchases

• Federal Home Loan Mortgage Corporation (Freddie Mac) has not made any share repurchases over the last 3-5 years.
• Under conservatorship by the Federal Housing Finance Agency (FHFA) since 2008, the company has prioritized rebuilding capital reserves, and common and preferred stock dividends were eliminated to conserve capital.

Share Issuance

• Freddie Mac issued $56 billion in securities through its multifamily risk transfer platform in 2024, transferring risk to private investors.
• This issuance included $27.7 billion in K-Deals and $22.1 billion in Multi PC issuances in 2024.
• The company also introduced new products like Giant PCs and multi-sponsor Q-Deals in 2024 to meet market demands and enhance liquidity.

Inbound Investments

• Freddie Mac has not received large inbound investments from strategic partners or private equity firms in the last 3-5 years.
• The U.S. Treasury provided financial support to keep Freddie Mac solvent following the 2008 financial crisis, in exchange for senior preferred stock and a warrant to purchase common stock.
• In late 2019, the Treasury allowed Freddie Mac to retain earnings to rebuild its capital reserves, with a target of $20 billion.

Outbound Investments

• There is no readily available information indicating that Federal Home Loan Mortgage Corporation made significant strategic investments in other companies over the last 3-5 years.

Capital Expenditures

• Freddie Mac's capital expenditures were $50 million in 2023, $54 million in 2022, and $55 million in 2021.
• Capital expenditures are primarily focused on technology and equipment to support its operations as a government-sponsored enterprise.
• Expected capital expenditures are projected to be $0 for 2025 and 2026 based on some valuation models, reflecting its asset-light business model focused on mortgage securitization rather than physical asset development.