Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 159

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 159
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 have certain measures to protect against mortgage fraud, there is no guarantee our measures will prevent or reduce our exposure to this risk. 

Other financial crimes, including money laundering, wire fraud, payment fraud, bribery, terrorist financing, and sanctions violations, may be committed by, against, or through us. While we have certain policies and procedures designed to prevent  various financial crimes and to protect us against any resulting losses, there is no guarantee our measures will prevent or reduce our exposure to these risks. 

We have experienced financial losses resulting from mortgage fraud, including institutional fraud perpetrated by counterparties. In the future, we may experience additional financial losses or reputational damage as a result of mortgage fraud or other financial crimes.

Declines in national or regional house prices, other adverse changes in the housing market, declines in the value of Multifamily properties, deterioration of property conditions, or adverse macroeconomic conditions, could negatively affect both our Single-Family and Multifamily businesses.

Our financial results and business volumes can be negatively affected by declines in house prices, other adverse changes in the housing market, declines in the value of Multifamily properties, deterioration of property conditions, or adverse macroeconomic conditions. This could (1) significantly increase our expected credit losses; (2) result in higher stress losses for both the Single-Family and Multifamily mortgage portfolios; (3) increase our losses, including losses resulting from our inability to recoup the full amount of investments or advances made to improve property conditions, with respect to foreclosure alternatives, third-party sales, and dispositions of REO properties; (4) reduce our returns or result in losses on our Single-Family and Multifamily guarantee businesses, as default rates could be higher than we expected when we issued the guarantees; (5) negatively affect the value of our unsecuritized loans, which could cause us to change our disposition strategies for our Single-Family delinquent and modified loans; or (6) adversely impact our ability to transfer credit risk. For additional information regarding these risks, see MD&A - Risk Management - Credit Risk.

Rapid changes in interest rates significantly impact affordability for both single-family and multifamily housing, and may also influence borrower behavior and performance in ways that we may not anticipate. The proportion of refinance loan purchases to total loan purchases in our Single-Family business has decreased during periods of elevated mortgage interest rates. Cash-out refinance loans acquired in a higher interest-rate environment expose us to greater mortgage credit risk. Some of our seller/servicer counterpart