Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 181

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 181
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 to our business and business relationships and expose us to operational, legal, and reputational risk.

FREDDIE MAC  |  2024 Form 10-K122

Risk Factors

We rely on third parties, including our sellers and servicers, or their vendors and other business partners, for certain important functions. Any failures by those third parties to deliver products or services, or to manage risks effectively, could disrupt our business operations or servicing of our portfolio, or expose us to other operational risks.

Our use of third parties, including suppliers, sellers and servicers, financial market utilities, and other third parties, exposes us to the risk of failures in their risk and control environments. We outsource certain key functions to these external parties, including some that are critical to financial reporting, our mortgage-related investment activity, loan underwriting, loan servicing, securities issuance and administration (i.e., CSS), and data storage and processing. We may enter into other key outsourcing relationships in the future and continue to expand our existing reliance on public cloud services. Additionally, we may be fully reliant on a third party to complete certain business operations (e.g., financial market utilities that provide the infrastructure for transferring, clearing, and settling payments on securities and other financial transactions). If one or more of these key external parties were not able to perform their functions for a period of time, perform them at an acceptable service level or handle changing volumes, or if one or more of them experiences a disruption in its own business or technology from any cause, our business operations could be constrained, disrupted, or otherwise negatively affected. Our use of third parties also exposes us to operational disruptions, financial losses, fraud, risk of regulatory action, or damage to our reputation if one or more of these third parties fails to maintain adequate risk and control environments. For example, a third party could experience a cybersecurity incident that negatively impacts the security and integrity of our data. As another example, if a court were to find a servicer liable for damages to borrowers because of their servicing practices, and the servicer did not have enough money to satisfy the judgment, the court may seek the remaining amounts from the securitization trust(s) into which the underlying loans were pooled. As an additional example, the properties underlying our Multifamily loans are maintained by borrowers who may not maintain these properties in accordance with the Multifamily Seller/Service Guide requirements. Our ability to monitor the activities or performance of certain third parties may be limited based on restricted access to and availability of risk management information for