Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 176

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 176
---
 or offerings could constrain our ability to pursue new business initiatives or improve existing business activities. 

Our technological connections with our customers and third parties, including suppliers, sellers and servicers, financial market utilities, and other third parties, are substantial and expose us to risk, which increases our risk exposure with respect to an operational failure of their infrastructure or systems. We have developed, and expect to continue to develop, software tools for use by our customers in the customers' loan production, loan servicing, and other processes. These tools may fail to operate properly, which could disrupt our, or our customers', business and adversely affect our relationships with our customers.

We continue to leverage third-party cloud infrastructure for both customer-facing applications and internal use applications. If we do not implement changes in a well-managed, secure, and effective manner, we may experience unplanned service disruptions or unplanned costs which may harm our business and operating results. In addition, our cloud infrastructure providers, or other service providers, have experienced and may in the future experience service disruptions, system breakdowns or failures, outages, downtime, defective system or software updates, or other cybersecurity incidents, as well as 

FREDDIE MAC  |  2024 Form 10-K120

Risk Factors

adverse changes to financial condition, bankruptcy, or other adverse conditions, which could have a material adverse effect on our business and reputation. Thus, our plans to increase the amount of our infrastructure that we outsource to the cloud or to other third parties may increase our risk exposure.

From time to time, we evaluate new technologies, including Artificial Intelligence-based technologies and methods, for our internal use or our customers' use. Utilizing such rapidly evolving technologies may increase our operational and regulatory risks. If we choose not to utilize such technologies, we could be at a competitive disadvantage. Moreover, some of our long-term initiatives designed to reduce our operational risk, or to increase operational efficiencies, particularly those relating to the implementation of new technology and the transition to third-party cloud-based platforms, increase our operational risk over the short term as we implement the changes, as many involve significant changes to our business processes, controls, systems and infrastructure. If we fail to implement these initiatives in a well-managed, secure and effective manner, we may experience significant service disruptions, system breakdowns or failures, outages, downtime, defective system or software updates, other cybersecurity incidents or other unforeseen costs or other unintended consequences which could result in material harm to our business and results of operations. Further, there can