Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 183

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 183
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, sale, securitization, and CRT activities of loans; the purchase and sale of securities; funding; the setting of guarantee fee prices; and the management of interest-rate, market, liquidity, and credit risk. Our use of models also affects our quality-control sampling strategies for loans in our Single-Family mortgage portfolio and potential settlements with our counterparties. Models are part of the process used to grant representation and warranty relief, which may be granted inappropriately if the models are incorrect. We also use models in our financial reporting process, including when measuring our allowance for credit losses and applying hedge accounting. See MD&A - Risk Management - Market Risk and Critical Accounting Estimates for additional information on our use of models.

FREDDIE MAC  |  2024 Form 10-K123

Risk Factors

The use of Artificial Intelligence-based technologies and methods contain inherent risks that may expose us to unexpected losses, damage our reputation, have an adverse impact on our business operations, and violate our legal and regulatory obligations.

Artificial Intelligence-based technologies and methods are rapidly evolving technologies that are being adopted by us, third parties with whom we do business and other market participants and such adoption may become more significant over time. Artificial Intelligence-based technologies and methods contain inherent risks, such as: the increased chance of identifying patterns in training data that are not representative of real effects and which could negatively impact Artificial Intelligence-based technologies and methods predictions when using new data; production of false or "hallucinatory" inferences or outputs; holding of certain biases; and predictions that are not easily interpretable which make testing the model and its predictions to make sure it meets human intuition difficult; and generation of otherwise inaccurate, incomplete, misleading, or unexpected results, errors, or inadequacies, any of which may not be easily detectable. Artificial Intelligence-based technologies and methods can present ethical issues and may subject us to new or heightened legal, regulatory, ethical, or other challenges, and inappropriate or controversial data practices by developers and end-users or other factors adversely affecting public opinion of Artificial Intelligence-based technologies and methods could impair the acceptance of Artificial Intelligence-based technologies and methods, including those incorporated in our business and operations. If the Artificial Intelligence-based technologies and methods that we use are deficient, inaccurate, or controversial, we could incur operational inefficiencies, competitive harm, legal and regulatory liability, brand or reputational harm, or other adverse impacts on our business and financial results. Further, there can be no assurance that our use of Artificial Intelligence-based technologies and methods will be successful