FREDDIE MAC CHAIRMAN AND CEO RICHARD SYRON DISCUSSES COMPANY’S RISK MANAGEMENT, VITAL ROLE IN AMERICA'S HOUSING FINANCE SYSTEM

McLean, VA – Freddie Mac (NYSE:FRE) plays a vital role in the world’s capital markets and America’s housing finance system by continually providing stability, liquidity and affordability, while minimizing risks to the economy and consumers, Chairman and Chief Executive Officer Richard Syron said today in remarks to the Money Marketeers of New York University in New York City.

Syron cautioned that the U.S. housing finance system does not require "quick fixes." "When we discuss proposals about systemic risk and the size of the retained portfolios, we need to consider potential impacts on markets," Syron said. "Experience has taught me that when you change the dynamics of a market, you often get unforeseen and unwanted consequences."

Freddie Mac continues to manage interest-rate and other risks prudently, and provides highly transparent and timely disclosures on its risk-management measures, Syron explained. To improve risk management and provide more liquidity to the housing market, the company led the development of the global callable debt market, which has in turn enabled Freddie Mac to rely on derivatives far less than banks do to hedge risks.

"Some of our critics argue that eliminating the Government Sponsored Enterprises would have virtually no impact on the amount of investment in U.S. housing," Syron said. "They also assume that eliminating the GSE portfolios would de-concentrate mortgage holdings in the market, and accordingly, reduce system risk. In fact, both of these are heroic assumptions and are difficult to support."

Syron specifically addressed criticism that as a GSE, Freddie Mac poses "systemic risk" to the U.S. economy. Pointing to repeated instances in the recent past in which the GSEs have protected the housing finance system – including the aftermaths of Hurricanes Katrina and Rita, as well as the Russian debt crisis and the collapse of Long-Term Capital Management in 1998 – Syron underscored the need for and value of Freddie Mac’s retained mortgage portfolio and mortgage- and debt-funding programs.

The full text of Syron’s speech at the Money Marketeers event is available on the company’s Web site, www.freddiemac.com/speeches/index.html.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and nearly four million renters in America.

###