Freddie Mac-No Politics (FMCC)

[tuzedaze]

Solid Business Results Partially Offset by Market-Related Losses Driven by Interest Rates

http://www.freddiemac.com/investors/er/pdf/2016er-2q16_release.pdf

Second Quarter 2016 Business Highlights
Business Fundamentals Remain Strong
Single-Family Guarantee Business
• Core (post-2008) book, which excludes HARP and other relief refinance loans, grew to 69 percent of the credit guarantee portfolio, from 68 percent in the first quarter.
• Purchase volume of $91 billion, up $22 billion from the first quarter primarily driven by lower mortgage interest rates.
• Serious delinquency rate of 1.08 percent, down from 1.20 percent at March 31, 2016 and the lowest since August 2008.
Multifamily Business
• Purchase volume of $9 billion, bringing half-year volume to a record $27 billion.

• $3.4 billion of net interest income, unchanged from the first quarter of 2016.
Single-family guarantee fee income increased; however, was offset by Decline in revenue from the investments portfolio.
• $0.4 billion (after-tax) estimated fair value loss as interest rates declined late in the
second quarter of 2016.
• $0.8 billion benefit for credit losses driven by the reclassification of seriously
delinquent loans from held-for-investment to held-for-sale.

Reducing Taxpayer Exposure Through Credit Risk Transfer Programs
Single-Family Guarantee Business
• Transferred a significant portion of the credit risk on over $85 billion of loans, and have now transferred a significant portion of the credit risk on over $500 billion since the program’s inception in 2013.
Multifamily Business
• Transferred a large majority of the credit risk on a quarterly record $15 billion of loans, and have now transferred a large majority of the credit risk on over $150 billion of loans since the program’s inception in 2009.


“We had both solid business and financial results this quarter, reflecting further improvement in our competitiveness and capabilities, highlighted by strong new guarantee business volumes. We also further reduced taxpayer risk through both
the efficient disposition of legacy assets and our credit risk transfer transactions, which achieved a major milestone in having now cumulatively transferred a significant portion of credit risk on over $650 billion of single-family and multifamily loans. “We continue to work together with our customers to make the housing finance system better for America’s homebuyers and renters. This includes improved accessible and affordable products and the delivery of robust tools and expanded offerings to our Seller- Servicer customers.”

Donald H. Layton
Chief Executive Officer