Freddie Mac will restructure a certain number of its mortgage securities operations as part of its ongoing initiative to focus business activities on its core mission, the company said today. Freddie Mac will cease the market-making activities of its Securities Sales & Trading Group business unit (SS&TG) and transfer that unit’s mortgage sourcing and investment activities to other Freddie Mac business units.

In a related decision, the company is also discontinuing its Money Manager program, through which it had designated eight registered investment advisers to manage a small portion of the company’s capital under prescribed investment guidelines. The company intends to continue its active support for the liquidity and depth of the market for its mortgage securities through its core securitization and investment business activities.

Dick Syron, chairman and CEO of Freddie Mac, explained that the company is making the changes to simplify its business operations. “Freddie Mac’s senior management team is intensely focusing on the full range of our secondary mortgage market activities,” Syron said.

“We’ll implement the restructuring of SS&TG’s business activities, including any disposition of assets, in an orderly manner over a period of months,” he added. “We intend to redeploy certain of the unit’s functions, including its mortgage sourcing capabilities, into the mainstream of our investment and securitization business. We’ll also continue to provide support for the market performance of our PCs through these core activities.”

Freddie Mac is a shareholder-owned corporation chartered by U.S. Congress to maintain a constant flow of mortgage funds for the nation’s housing market.


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