Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 50

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 13
Chunk 50
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, risk taxonomy, risk appetite, risk limits, and other risk metrics and indicators. In addition, ERM provides oversight of first line divisions and monitors and assesses risk. ERM is responsible for reporting on the enterprise risk profile to senior management, the Board of Directors, and the Board Risk Committee, and escalating significant risk issues as appropriate.

The second line also includes Compliance, which is responsible for the independent assessment and oversight of ethics and compliance risk across the company. In addition, Compliance advises employees and business divisions on compliance with policies and procedures involving ethical and regulatory matters and consults with the Legal Division on any such regulatory matters or ethical issues that include legal requirements or potential legal liability. Compliance issues and maintains compliance policies and standards for the company. Compliance also establishes and maintains the company's Code of Conduct.

The third line consists of Internal Audit, which is responsible for independently evaluating the adequacy and effectiveness of governance, risk management, and control processes, including, but not limited to, the way the first and second lines achieve risk management and control objectives.

The Enterprise Risk Committee, established by the CEO and chaired by the CRO, is comprised of members of senior management. This Committee monitors the risk profile of each business division and the management of the company’s risk exposures consistent with the Enterprise Risk Policy and reviews aggregate enterprise-wide risks, including material and emerging risks.

The Board of Directors provides enterprise-wide risk oversight, including through its committees. The Board of Directors also approves the Enterprise Risk Policy, which establishes the enterprise risk management program and framework; the Company Strategic Plan and the Annual Business Plan; and the enterprise risk appetite, which must be aligned with the Company Strategic Plan and the Annual Business Plan, subject to FHFA approval as Conservator. For additional information on the role of the Board of Directors' committees risk oversight responsibilities, see Directors, Corporate Governance, and Executive Officers - Corporate Governance - Board of Directors and Board Committee Information.

FREDDIE MAC  |  2024 Form 10-K48

Management's Discussion and AnalysisRisk Management

Credit Risk

Overview

Credit risk is the risk associated with the inability or failure of a borrower, issuer, or counterparty to meet its financial and/or contractual obligations. We are exposed to both mortgage credit risk and counterparty credit risk.

Mortgage credit risk is the risk associated with the inability or failure of a borrower to meet its financial and/or contractual obligations. We are exposed to two types of mortgage credit risk:

n    Single-Family mortgage credit risk, through our ownership or