Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 175

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 175
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 may trigger additional collateral or funding obligations or restrictions which, could have a material adverse effect on our liquidity, including as a result of credit-related contingent features in certain of our derivative contracts.

For additional information, see MD&A - Liquidity and Capital Resources.

Operational Risks

A failure in our operational systems or infrastructure, or those of third parties, could impair our ability to provide market liquidity, disrupt our business operations, damage our reputation, expose us to legal risk, and cause financial losses.

Operational risk continues to be elevated due to the volume, complexity, and pace of change across the company. We face significant levels of operational risk due to a variety of factors, including the size and complexity of our business operations, the amount of change to our core systems required to keep pace with market demands, regulatory requirements, and business initiatives, and the ever-changing cybersecurity landscape. Shortcomings or failures in our internal processes, people, or systems, or those of third parties with which we interact, could lead to a variety of adverse events, including impairment of our liquidity, disruption of our business (e.g., purchasing mortgages, issuing debt and mortgage-related securities, or entering into CRT transactions), incorrect or late payments on our securities and other obligations, including CRT transactions, errors in our financial statements, liability to customers or investors, further legislative or regulatory intervention, fines, or penalties, reputational damage, and financial and economic loss. 

Our business is highly dependent on our ability to process a large number of transactions on a daily basis and collect, manage and analyze significant amounts of information, much of which is provided by third parties. This information may be incorrect, our receipt of information may be delayed, or we may fail to properly manage or analyze it. The inability to correctly process transactions and information could lead to the execution of business transactions, including CRT transactions, that fail to meet our economic return thresholds, cause financial and economic loss, cause reputational damage, and cause other disruptions to our business operations.

The transactions we process are complex and are subject to various legal, accounting, tax, and regulatory standards, which can change rapidly. Our financial, accounting, payment, data processing, or other operating systems and facilities may contain design flaws or may fail to operate properly, adversely affecting our ability to process transactions, including our ability to compile and process legally required information. We have certain systems that require manual support and intervention, which may lead to heightened risk of system failures. The inability of our systems to accommodate a high volume of transactions or new types of transactions