Federal Home Loan Mortgage Corp 8-k (events Or Changes Between Quarterly Reports) 2009-02-24
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 18, 2009 FEDERAL HOME LOAN MORTGAGE CORPORATION (Exact name of registrant as specified in its charter) Freddie Mac
Federally chartered corporation
000-53330
52-0904874
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
8200 Jones Branch Drive McLean, Virginia
22102
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (703) 903-2000
Not applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01. Other Events On September 7, 2008, Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation), through the Federal Housing Finance Agency (FHFA), in its capacity as Conservator of Freddie Mac, entered into a Senior Preferred Stock Purchase Agreement (Purchase Agreement) with the U.S. Department of the Treasury (Treasury). Under the Purchase Agreement, Treasury provided us with its commitment to provide up to $100 billion in funding under specified conditions. The Purchase Agreement was subsequently amended and restated on September 26, 2008. A copy of the Purchase Agreement, as amended and restated on September 26, 2008, was attached as Exhibit 10.1 to our report on Form 8-K filed on September 30, 2008. On February 18, 2009, Secretary of the Treasury Geithner issued a statement regarding Treasury’s commitment to Freddie Mac and the Federal National Mortgage Association (Fannie Mae). The statement indicated that Treasury is amending the Purchase Agreement to increase Treasury’s funding commitment to us to up to $200 billion, increase the size of our retained mortgage portfolio allowed under the Purchase Agreement by $50 billion to $900 billion and correspondingly increase our allowable debt outstanding. The statement also said that Treasury will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to promote stability and liquidity in the marketplace. Secretary Geithner stated that “Fannie Mae and Freddie Mac are critical to the functioning of the housing finance system in this country and play a key role in making mortgage rates affordable and maintaining the stability and liquidity of our mortgage market” and that “[t]he increased funding will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners.” A copy of the statement by Secretary Geithner is attached as Exhibit 99.1 to this report and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits (d) Exhibits The following exhibit is being filed as part of this Report on Form 8-K: Exhibit Number 99.1
Description of Exhibit Statement by Secretary Tim Geithner on Strengthening Treasury’s Commitment to Fannie Mae and Freddie Mac dated February 18, 2009
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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FEDERAL HOME LOAN MORTGAGE CORPORATION By:
Date: February 24, 2009
/s/ John R. Dye John R. Dye SVP — Principal Deputy General Counsel, Corporate Affairs
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EXHIBIT INDEX Exhibit Number 99.1
Description of Exhibit Statement by Secretary Tim Geithner on Strengthening Treasury’s Commitment to Fannie Mae and Freddie Mac dated February 18, 2009
Exhibit 99.1 February 18, 2009 tg32 Statement by Secretary Tim Geithner on Treasury’s Commitment to Fannie Mae and Freddie Mac Washington, DC — Today, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market, to help maintain mortgage affordability, and to help keep interest rates low. Fannie Mae and Freddie Mac are critical to the functioning of the housing finance system in this country and play a key role in making mortgage rates affordable and maintaining the stability and liquidity of our mortgage market. In 2008, almost three-quarters of new home loans were financed or guaranteed by Fannie Mae and Freddie Mac. Using funds already authorized by Congress for this purpose, Treasury is amending the Preferred Stock Purchase Agreements, contractual agreements between the Treasury and the conserved entities designed to ensure that each company maintains a positive net worth, to $200 billion each from their original level of $100 billion each. The increased funding will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners. In addition, the Treasury Department will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to promote stability and liquidity in the marketplace. Treasury will also increase the size of the GSEs’ retained mortgage portfolios allowed under the agreements — by $50 billion to $900 billion — along with corresponding increases in the allowable debt outstanding. The increase announced today is not intended to indicate any estimate of possible losses with respect to the companies, but to provide assurance to market participants that Congress gave these companies a special purpose to support housing finance. Given the difficulties in the housing market today, we stand firmly behind their ability to provide that support. Background: Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that were created to provide stability in the secondary mortgage market and promote access to mortgage credit throughout the United States. In 2008, Fannie Mae and Freddie Mac purchased or guaranteed almost three-quarters of all mortgages being originated in the United States. By purchasing some mortgages and guaranteeing others, Fannie Mae and Freddie Mac help bring the liquidity of global capital markets to local banks and other financial institutions, which lowers mortgage costs for borrowers in communities across the United States. These savings can be achieved because Fannie Mae and Freddie Mac are able to access a broader array of investors resulting in lower cost of funds than typical local banks. Last July, Congress granted Treasury new authorities to provide financial support to Fannie Mae and Freddie Mac in order to provide stability to financial markets, support the availability of mortgage finance, and protect taxpayers. Even though neither institution is near its current $100 billion limit for funding from Treasury under the Preferred Stock Purchase Agreements — based on preliminary disclosures from the last quarter of 2008, total funding provided to Freddie Mac could approach $50 billion and total funding for Fannie Mae could approach $16 billion — it is crucial to maintain confidence in both of these institutions even under worse-than-expected economic conditions. Finally, it is important to note that these funding commitments are made under authority provided by the Housing and Economic Recovery Act and do not use any money allocated under the Emergency Economic Stabilization Act (EESA) or the Financial Stability Plan. ###
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 18, 2009 FEDERAL HOME LOAN MORTGAGE CORPORATION (Exact name of registrant as specified in its charter) Freddie Mac
Federally chartered corporation
000-53330
52-0904874
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
8200 Jones Branch Drive McLean, Virginia
22102
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (703) 903-2000
Not applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01. Other Events On September 7, 2008, Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation), through the Federal Housing Finance Agency (FHFA), in its capacity as Conservator of Freddie Mac, entered into a Senior Preferred Stock Purchase Agreement (Purchase Agreement) with the U.S. Department of the Treasury (Treasury). Under the Purchase Agreement, Treasury provided us with its commitment to provide up to $100 billion in funding under specified conditions. The Purchase Agreement was subsequently amended and restated on September 26, 2008. A copy of the Purchase Agreement, as amended and restated on September 26, 2008, was attached as Exhibit 10.1 to our report on Form 8-K filed on September 30, 2008. On February 18, 2009, Secretary of the Treasury Geithner issued a statement regarding Treasury’s commitment to Freddie Mac and the Federal National Mortgage Association (Fannie Mae). The statement indicated that Treasury is amending the Purchase Agreement to increase Treasury’s funding commitment to us to up to $200 billion, increase the size of our retained mortgage portfolio allowed under the Purchase Agreement by $50 billion to $900 billion and correspondingly increase our allowable debt outstanding. The statement also said that Treasury will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to promote stability and liquidity in the marketplace. Secretary Geithner stated that “Fannie Mae and Freddie Mac are critical to the functioning of the housing finance system in this country and play a key role in making mortgage rates affordable and maintaining the stability and liquidity of our mortgage market” and that “[t]he increased funding will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners.” A copy of the statement by Secretary Geithner is attached as Exhibit 99.1 to this report and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits (d) Exhibits The following exhibit is being filed as part of this Report on Form 8-K: Exhibit Number 99.1
Description of Exhibit Statement by Secretary Tim Geithner on Strengthening Treasury’s Commitment to Fannie Mae and Freddie Mac dated February 18, 2009
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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FEDERAL HOME LOAN MORTGAGE CORPORATION By:
Date: February 24, 2009
/s/ John R. Dye John R. Dye SVP — Principal Deputy General Counsel, Corporate Affairs
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EXHIBIT INDEX Exhibit Number 99.1
Description of Exhibit Statement by Secretary Tim Geithner on Strengthening Treasury’s Commitment to Fannie Mae and Freddie Mac dated February 18, 2009
Exhibit 99.1 February 18, 2009 tg32 Statement by Secretary Tim Geithner on Treasury’s Commitment to Fannie Mae and Freddie Mac Washington, DC — Today, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market, to help maintain mortgage affordability, and to help keep interest rates low. Fannie Mae and Freddie Mac are critical to the functioning of the housing finance system in this country and play a key role in making mortgage rates affordable and maintaining the stability and liquidity of our mortgage market. In 2008, almost three-quarters of new home loans were financed or guaranteed by Fannie Mae and Freddie Mac. Using funds already authorized by Congress for this purpose, Treasury is amending the Preferred Stock Purchase Agreements, contractual agreements between the Treasury and the conserved entities designed to ensure that each company maintains a positive net worth, to $200 billion each from their original level of $100 billion each. The increased funding will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners. In addition, the Treasury Department will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to promote stability and liquidity in the marketplace. Treasury will also increase the size of the GSEs’ retained mortgage portfolios allowed under the agreements — by $50 billion to $900 billion — along with corresponding increases in the allowable debt outstanding. The increase announced today is not intended to indicate any estimate of possible losses with respect to the companies, but to provide assurance to market participants that Congress gave these companies a special purpose to support housing finance. Given the difficulties in the housing market today, we stand firmly behind their ability to provide that support. Background: Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that were created to provide stability in the secondary mortgage market and promote access to mortgage credit throughout the United States. In 2008, Fannie Mae and Freddie Mac purchased or guaranteed almost three-quarters of all mortgages being originated in the United States. By purchasing some mortgages and guaranteeing others, Fannie Mae and Freddie Mac help bring the liquidity of global capital markets to local banks and other financial institutions, which lowers mortgage costs for borrowers in communities across the United States. These savings can be achieved because Fannie Mae and Freddie Mac are able to access a broader array of investors resulting in lower cost of funds than typical local banks. Last July, Congress granted Treasury new authorities to provide financial support to Fannie Mae and Freddie Mac in order to provide stability to financial markets, support the availability of mortgage finance, and protect taxpayers. Even though neither institution is near its current $100 billion limit for funding from Treasury under the Preferred Stock Purchase Agreements — based on preliminary disclosures from the last quarter of 2008, total funding provided to Freddie Mac could approach $50 billion and total funding for Fannie Mae could approach $16 billion — it is crucial to maintain confidence in both of these institutions even under worse-than-expected economic conditions. Finally, it is important to note that these funding commitments are made under authority provided by the Housing and Economic Recovery Act and do not use any money allocated under the Emergency Economic Stabilization Act (EESA) or the Financial Stability Plan. ###
