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Did Freddie Mac name a new risk chief?
The SEC Form 8-K dated December 16, 2025, announced that Kenny M. Smith would become Freddie Mac’s CEO effective December 17, 2025, and join its board. The filing described his prior position as a retired senior principal at Deloitte Consulting, where he had served as U.S. Financial Services Industry Leader. It did not describe him as chief risk officer.
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The official materials covered here do not establish a separate appointment of a new chief risk officer. That means the headline’s risk-chief claim should be treated as unverified, not as a confirmed leadership change. Freddie Mac does describe risk management as part of its mission and operations, but a general statement about managing risk is not evidence that a particular executive was appointed to lead that function.
What did Freddie Mac report in its latest financial results here?
Freddie Mac released second-quarter 2026 results on July 30, 2026. The figures give useful context about the business, but they are not a valuation of FMCC common stock.
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| Reported item | Freddie Mac’s figure | What it tells investors |
|---|---|---|
| Net income, second quarter 2026 | $3.8 billion | Quarterly profit was substantial, but its year-over-year increase should not be treated as all recurring operating growth. |
| Net revenues, second quarter 2026 | $6.0 billion | Revenue provides operating context; it does not show how much value belongs to common shareholders after senior claims and potential dilution. |
| Net worth, June 30, 2026 | $78 billion | This is a reported company balance-sheet measure, not a common-equity fair-value estimate. |
| Total mortgage portfolio, June 30, 2026 | $3.7 trillion | The scale of the portfolio indicates the breadth of the business, not the value per FMCC share. |
| Single-Family serious delinquency rate, June 30, 2026 | 0.60%, versus 0.55% a year earlier | A relevant credit indicator, but not a complete forecast of future credit losses. |
| Multifamily delinquency rate, June 30, 2026 | 0.51%, versus 0.47% a year earlier | Another risk indicator that needs to be considered alongside broader credit and economic conditions. |
Freddie Mac said second-quarter net income increased 61% year over year. It attributed the increase primarily to a $0.9 billion benefit for credit losses, driven mainly by a release of Single-Family credit reserves. A reserve release can lift current-period earnings without representing the same kind of recurring growth as higher ongoing revenue; investors should therefore avoid simply annualizing the quarter’s profit as a normal earnings run rate.
The company’s July 30 release quoted William J. Pulte, Director of the U.S. Federal Housing and Chair of Freddie Mac’s Board of Directors, describing the quarter as reflecting strong revenues, a credit benefit and cost discipline. That management characterization is useful context, but it is not independent evidence that the common shares trade below fair value.
Why $78 billion of net worth does not equal common-stock value
Freddie Mac has operated under Federal Housing Finance Agency (FHFA) conservatorship since September 2008, according to its second-quarter 2026 release. The company reported $78 billion of net worth at June 30, 2026, while its senior preferred stock had a $146.6 billion liquidation preference. It also reported $140.2 billion of remaining Treasury funding commitment at that date.
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteThose figures describe distinct parts of a complicated capital structure. Net worth is not the amount freely available to FMCC common shareholders: the senior preferred stock has a large liquidation preference, and the Treasury relationship, conservatorship arrangements and potential future capital requirements affect what could ultimately remain for common equity. The release said the senior preferred liquidation preference would rise to $150.4 billion at September 30, 2026, based on the increase in second-quarter net worth. That was a stated future amount in the release, not the June 30 balance.
As a result, subtracting a preferred-stock figure from net worth—or treating reported net worth as if it were common equity value—does not by itself produce a valid FMCC valuation. A credible analysis must model how the senior preferred claims are treated, what capital the company needs, and how any recapitalization or release from conservatorship would affect existing common shareholders.
What would “75% undervalued” mean?
The phrase needs a definition. If it means the shares trade at a 75% discount to estimated fair value, then the current share price is one-quarter of that estimate. That is different from saying the shares have 75% upside: a price that rises 75% becomes 1.75 times its starting value, not four times its starting value.
Neither the second-quarter results nor the official materials covered here provide the inputs needed to test either claim. In particular, they do not establish a current FMCC share price and date for the calculation, a fully diluted share count, a fair-value estimate, or a company-published target price. Without those, a precise percentage discount is unsupported.
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- Share price and date: State the FMCC price used and the date it was observed; a discount calculation changes as the market price changes.
- Share count and dilution: Identify the common shares included and explain the treatment of warrants and any other potential dilution.
- Senior preferred stock: Specify how the liquidation preference and Treasury arrangements are handled rather than assuming reported net worth accrues to common shareholders.
- Capital requirements: Estimate the capital needed under the assumed post-conservatorship framework and explain how it would be raised or retained.
- Policy path: State the assumed probability and timing of recapitalization, changes to the Treasury agreements, and release from conservatorship. These are scenarios, not settled outcomes.
- Normalized earnings: Separate recurring earnings power from quarter-to-quarter changes such as the reserve release that contributed to second-quarter 2026 results.
- Credit and market conditions: Account for housing and economic conditions, interest rates, mortgage spreads, regulation and credit outlook. Freddie Mac’s release identifies these kinds of factors as relevant to forward-looking outcomes.
To make a 75% claim more useful, an analyst should compare more than one explicitly labeled scenario using the same measures: senior preferred treatment and dilution, post-conservatorship capital, the timing and likelihood of policy changes, normalized earnings, and implied value per fully diluted share. These would be the analyst’s assumptions, not Freddie Mac guidance. A single favorable outcome should not be presented as a certain fair value.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the official filings can—and cannot—settle
Freddie Mac’s investor-relations page points to its second-quarter 2026 release, Form 10-Q, webcast and related materials. The company’s release also directs readers to its annual and quarterly SEC filings for a fuller account of its business and financial position. Those are appropriate starting points for checking reported results and conservatorship facts; they do not substitute for a valuation model with explicit assumptions.
For market-status context, Freddie Mac’s 2024 Form 10-K, filed in February 2025, listed its voting common stock as OTCQB: FMCC and said the company had no securities registered under Section 12(b). Because that information is from an earlier filing, it should not be taken as confirmation of the trading venue today.
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