Published On: Tue, May 31st, 2016

What’s Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) Scorecard?

Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) or Freddie Mac, recently released its scorecard for the last month, highlighting the summary of its operations and showing how far it has gone with pursuing certain targets. As it turns out, Freddie Mac isn’t bad off because the company is already past its mortgage portfolio reduction goal for 2016. Although that’s a sign of positive things for the company, some are worried about the future of Freddie Mac and its sibling Fannie Mae.

What transpired in April?

During the month of April 2016, Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) was able to trim the portfolio of its mortgage-related investments at compound annualized rate of 22.4%. When you work that out, you realize that the company reduced its mortgage portfolio by $6.4 billion.

Following the development last month, the company’s portfolio of unpaid principal stood at $333.5 billion at the end of the month. With that, Freddie Mac has already exceeded its target to reduce aggregate portfolio of unpaid principal to $339.3 billion in 2016.

During April, Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) also reported that the value of its mortgage-related investments fell by about $72 billion from $405.6 billion at the end of March 2015. Additionally, the company said its single-family related mortgage volumes stood at $14.9 billion at the end of April.

Freddie Mac’s serious delinquency rate fell 0.05% in April to hit 1.15%. The company said it modified 3,689 loans in April and since the beginning of the year, it has modified 14,597 loans.

What transpired in 1Q2016

Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) logged a net loss of $354 million in 1Q2016. The quarter loss appeared to heighten concern about the future of the company at a time when the government continues to sweep profit from it. Some worry that shifts in accounting requirement and the government’s continued sucking of profits from Freddie Mac could see the company fall in need for another bailout.

Although it appeared that the Obama Administration wanted to replace Federal Home Loan Mortgage Corp (OTCMKTS:FMCC) and Fannie Mae with a more versatile mortgage system, politicians in Washington have appeared to be dragging their feet to make that happen. That has created a complicated operating environment for Freddie Mac and Fannie Mae whereby the keeping turning all their profits to Uncle Sam as their capital buffer shrinks.

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