Freddie Mac 2Q15 Earnings Call Notes

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Reducing our risk

“I’ll switch gears now and update you on our progress to build the better Freddie Mac. In particular, our progress in reducing risk in our ongoing business activities is one of the most important things that we’re doing in conservatorship. And we’re doing it in a way that is good for tax payers, good for the financial system as a whol”

By creating new asset classes to transfer risk

“We’re doing this of course by creating new asset classes to transfer large amounts of mortgage credit risk to the private market and doing so, in a taxpayer friendly manner.”


“I’m proud to say that we were the first to market the most successful structures that do this. They are the key deals from multifamily, stacker bonds for single family and also our ACIS reinsurance transactions for single family.”

Also sold 4.3B of investment portfolio assets during the quarter

“Innovation is also visible in a way we are responsibly winding down the retained investment portfolio. As you know, our focus is on reducing less liquid assets, which are mainly impaired mortgage asset. We sold another $4.3 billion of such assets in the second quarter, which included $900 million of non-performing that is NPL sales. ”

97% LTV product for underserved borrowers

“We’ve increased our focus on underserved, home buyers and communities. We have a new executive heading up single-family’s effort to strengthen affordable lending opportunities. This includes as, but one example, new initiatives to help keep housing finance agencies, fund mortgages for underserved borrowers with our 3% down Home Possible Advantage mortgage.”