Freddie COO: Financials Require 'Triangulation'

To get a true understanding of Freddie Mac's financials one would have to "triangulate," Freddie executive vice president and chief operating officer Paul Peterson told a press luncheon Oct. 20 at the Mortgage Bankers Association of America's annual convention in San Diego.He compared it to using a global positioning system, which uses three reference points to get an accurate location. A single summary statistic does not give an accurate measure of Freddie Mac, according to Mr. Peterson. Part of the problem is that a large portion of assets are being marked to market but liabilities are not, which he said will result in volatility in Freddie Mac's financial statement. The fair-value balance sheet is more important because it marks to market all assets and all liabilities. Separately, Mr. Peterson said that unlike Fannie Mae, Freddie Mac expects to meet all three of its affordable housing goals. During a refinance boom it becomes a challenge to meet these goals, but earlier this year Freddie Mac was very active in seeking out portfolios of loans to meet the affordable housing criteria, he said.