Essential Liquidity A constant source of funding for your mortgage production

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Essential LiquidityA constant source of funding
for your mortgage production Speaker NameDate
of event
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Essential Liquidity
A constant source of funding for your mortgage
production

• During a time of market uncertainty, Freddie Mac
  remains a stable and constant source of liquidity
  for your mortgage production. Each day, we fund
  mortgages in all geographic markets and provide
  you with a variety of cash and securities
  execution options to meet your specific business
  needs.
• As a source of essential liquidity, Freddie Mac
  is
• Playing a leadership role in implementing the
  federal Making Home Affordable Program with the
  Freddie Mac Relief Refinance MortgageSM and the
  federal Home Affordable Modification Program
• Continually purchasing or guaranteeing hundreds
  of billions of dollars of mortgage loans and
  mortgage related securities
• Buying conventional conforming and super
  conforming mortgages in all geographic markets
  through a variety of competitive executions

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Current Housing Market Conditions
A constant source of funding for your mortgage
production
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House Prices Have Declined by 17 Percent Since
June 2006
A constant source of funding for your mortgage
production
U.S. Quarterly Percentage Growth
Source -- Freddie Mac. Based on Freddie Macs SF
portfolio.
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GSEs Support A Majority of Home Loans, But
Comprise A Small Share of Delinquencies
A constant source of funding for your mortgage
production
Percent of MDO
Percent of 90-Day Lates
Meanwhile, non-Agency MBS comprise 13 of MDO but
42 of delinquencies
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We Provide Liquidity throughSingle Family Credit
Guarantees
A constant source of funding for your mortgage
production
Freddie SF PC Portfolio
1.85 T
Ending Balance in Billions
Source Freddie Mac annual reports and monthly
volume summaries
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The GSEs Are Supporting Three-Quarters of the
Market Today
A constant source of funding for your mortgage
production
Percent of MBS Issuances
2Q09
77
19
4
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GSEs Have Kept Conforming Rates Lower
A constant source of funding for your mortgage
production
Effective Spread Between Jumbo and Conforming
30-Year FRM
bps
30-Yr FRM Rates, June 2009 Conforming 5.38
Super-Conforming 5.58
Jumbo 6.32
Source HSH Associates. Effective spread adds
fees and points as of August 28, 2009.
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Our Business Volumes Have Surged
A constant source of funding for your mortgage
production
in Billions
Freddie SF Purchases
Source Freddie Mac monthly volume summaries
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The Federal Making Home Affordable Program
A constant source of funding for your mortgage
production
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The Making Home Affordable Program Freddie
Macs Relief Refinance MortgageSM Same Servicer
Option
A constant source of funding for your mortgage
production

• Who will benefit?
• Homeowners who are current and would benefit from
  refis, including those with underwater mortgages
• Borrowers with loans already owned or guaranteed
  by Freddie Mac, available through borrowers
  current Seller/Servicer
• Features
• Properties are 1- to 4-unit, owner-occupied
  includes primary residences, condos, second
  homes, and investment properties
• Simplified refis for loans up to 125 LTV no
  maximum TLTV
• Allows the lesser of 4 percent of the new
  refinance mortgage amount or 5,000 of closing
  costs/prepaids, to be rolled into the new
  refinance mortgage
• Rep-and-warrant relief (collateral only) for
  eligible 1-unit properties using point value
  estimate data from Home Value Explorer
• No new or increased mortgage insurance

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The Making Home Affordable Program Freddie
Macs Relief Refinance MortgageSM Open Access
Option
A constant source of funding for your mortgage
production

• Who will benefit?
• Homeowners who are current and would benefit from
  refis, including those with underwater mortgages
• Borrowers with loans already owned or guaranteed
  by Freddie Mac can be originated by any Freddie
  Mac Seller/Servicer as of October 1, 2009
• Features
• Same features as Same Servicer Option, including
  up to 125 percent LTV
• Requires new underwriting can be assessed
  through Loan Prospector
• Allows the lesser of 4 percent of the new
  refinance mortgage amount or 5,000 of closing
  costs/prepaids, to be rolled into the new
  refinance mortgage

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The Making Home Affordable Program Federal
Home Affordable Modification Program
A constant source of funding for your mortgage
production

• Who will benefit?
• At-risk homeowners where lower mortgage payments
  could prevent foreclosure
• Current borrowers who are in danger of imminent
  default, as well as borrowers who are delinquent,
  in foreclosure, or in active bankruptcy
• Loans already owned or guaranteed by Freddie Mac
  or Fannie Mae
• Features
• Reduces borrower mortgage payments to as low as
  31 DTI
• Provides additional financial incentives for
  Servicers and borrowers
• Suspends foreclosure sales for those under
  consideration for this program
• Available on 1- to 4-unit, owner-occupied,
  primary residences
• Requires borrowers with DTI of ? 55 to attend
  credit counseling
• Effective immediately

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Continually Injecting Liquidity
A constant source of funding for your mortgage
production
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We Fund Mortgages Every Day
A constant source of funding for your mortgage
production

• In 2008, we helped stabilize the market by
  purchasing or guaranteeing more than 460 billion
  in mortgage loans and mortgage-related
  securities, helping to finance more than 1.7
  million single-family homes and 620,000 units of
  rental housing.
• To continue to provide your business with
  liquidity, we have
• Aligned our Single-Family business priorities
  to reflect market stabilization goals
• Continued to buy a variety of mortgages,
  holding the risk for the life of every loan we
  purchase that meets our requirements
• Increased our role in stabilizing the market
  with our super conforming offering and
  increased loan limits in high-cost areas

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Business Priorities Reflect Our Goal to
Stabilize Mortgage Markets
A constant source of funding for your mortgage
production

• Support all housing markets at all times
• Reinforce prudent lending standards that support
  sustainable homeownership
• Implement change in GSE loan limits
• Conforming limit remains at 417,000
• New super conforming limit in high-cost markets
• Use risk-based pricing to support a broader array
  of loans
• Set credit and pricing policies based on lessons
  learned from the housing boom-and-bust

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Prudent Lending Standards Support Liquidity
A constant source of funding for your mortgage
production

• We have modified requirements so that more
  lenders and borrowers can succeed over the long
  term. Weve
• Adjusted maximum loan-to-value and
  debt-to-income ratios in response to housing
  market conditions
• Over the last two years, eliminated the purchase
  of stated income/stated assets- type loans and
  other riskier mortgages originated with little
  documentation or verification
• Modified lending requirements to address the
  performance of mortgages with excessive layered
  risk and historically higher default rates
• Because of these actions, we continue to offer a
  variety of affordable mortgage products and
  property types to meet your borrowers needs.

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Super Conforming Offering Provides Increased
Conforming Loan Limits in Certain High-Cost Areas
A constant source of funding for your mortgage
production

• Overview
• Introduced super conforming offering January 1,
  2009
• New loan limits for high-cost areas
• New legislation announced February 2009 increased
  the loan limit to the higher of the conforming
  jumbo (2008) or super conforming (2009) limit
• Raised the maximum loan limit to 729,750
  (1-unit) for loans in eligible locations higher
  limits for 2- to 4-units
• SIFMA has already indicated that it will extend
  the 10 de minimis inclusion for loans at the
  higher limit to be TBA eligible
• Cash and Guarantor executions available
• De minimis requirement Greater of 2M or 10 of
  monthly cash deliveries

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Strong Cash Execution Provides Needed Liquidity
A constant source of funding for your mortgage
production

• Servicing-released or servicing-retained Cash
  execution options yield top securities market
  prices for your loans.
• Servicing-retained sale option lets you retain
  your borrower relationships and hold the value
  of your servicing asset
• Servicing-released sale option maximizes your
  servicing-released premiums with multiple buyers
  for your servicing
• Best efforts commitment option reduces your
  interest rate and pipeline risk, providing
  greater control over all your secondary market
  activities.
• Lock in competitive prices for fixed-rate cash
  contracts
• Contracts become mandatory only if the loan
  closes
• For loans that dont close despite your best
  efforts, locks are cancelled without a pair-off
  fee

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Freddie Mac is Committed to Working Closely With
You
A constant source of funding for your mortgage
production

• Freddie Mac is planning for the future. Today and
  tomorrow, we will be a constant and stable source
  of liquidity for responsible lending products
  that will continue to provide affordable mortgage
  financing for you and your borrowers.

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A constant source of funding for your mortgage
production