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Focus on:
Callable REMICs (CPC)
Freddie Mac Callable REMIC securities are structured multiclass securities (issued in any type of REMIC structure) with the
added feature that they are subject to a third-party call option. Callable REMICs are created in one of two forms, each involving
use of Freddie Mac Callable Pass-Through Certificates (CPC). More than $17.5 billion in CPCs were issued in 2002.

Introduced in 1995, Freddie Mac’s CPCs are issued as related pairs of “Callable” and “Call” classes. The callable class will
receive all of the principal and interest (P&I) cash flow from an underlying pool of collateral, typically consisting of Gold PCs
formed into a Giant PC. Gold PCs, Giants, existing REMIC structures and GNMA pools are all examples of eligible collateral
for CPCs. The call class holder receives none of the cash flow, but rather, has the right to direct Freddie Mac to redeem the
callable class by giving appropriate notice and by paying Freddie Mac the funds it uses to actually redeem the callable class. In
exchange, the call class holder receives the underlying collateral.

Structures
By integrating the CPC structure into the REMIC securities, Freddie Mac is able to issue Callable REMICs. Callable REMICs
are created either by a) using a CPC callable class as collateral for a REMIC issuance, or b) using a REMIC class as collateral
for a CPC issuance.

Structure #1: REMIC backed by CPCs

The first callable REMIC structure consists of the issuance of REMIC regular classes backed by a CPC callable class. The
principal and interest cash flow on the callable class will be passed through to the REMIC class investors. When the call is
exercised, the callable class and the REMIC regular classes will be redeemed, and the call class investor will receive the
underlying collateral.

Callable Passthrough Certificate (CPC) REMIC

A
Underlying Collateral
P&I P&I
A1
Gold PCs, etc. Callable B
Class

C
B1
Call Call
Option Class
R
The holder of the B1 call class will not receive payments of principal and interest, but will have the right to direct Freddie Mac
to redeem, beginning on a specified payment date, the outstanding principal amount of the A1 callable class (at the CPC level)
and concurrently, all of the regular classes at the REMIC level, at the stated redemption price as specified in the Offering
Circular. The redemption price will normally equal 100% of the A1 callable class’ unpaid principal amount, plus interest to the
date of redemption. Once the redemption is complete, the B1 call class investor will receive the underlying collateral.

Structure #2: CPC Callable and Call Classes Backed by REMIC Classes
The second callable REMIC structure consists of one or more pairs of CPC callable and call classes that are backed by a
REMIC regular class. Each callable class is entitled to receive the cash flow from a distinct REMIC regular class until the
related call is exercised. When a call is exercised, the callable class is redeemed and the call class investor receives the
underlying REMIC regular class.

The holder of the B1 call class will not receive payments of principal and interest, but will have the right to direct Freddie Mac
to redeem, beginning on a specified payment date, the outstanding principal amount of the A1 callable class, at the stated
redemption price, as specified in the Offering Circular. The redemption price will equal normally 100% of the A1 callable class’
unpaid principal amount, plus interest to the date of redemption. Once the redemption is complete, the B1 call class investor
will then receive the A regular REMIC class.

Exercising the Call Option

Freddie Mac must be notified by at least the
preceding calendar month (or up to three to five days
REMIC CPC prior to the record date occurring that month) of the
P&I call holder’s intent to call the callable class. Upon a
A1 redemption of the REMIC class (or callable class
A Callable
Class backed by REMIC class), each holder of a callable
class will receive the outstanding principal amount
B of that holder’s security plus 30 days’ interest at its
Call B1
Call
applicable class coupon on such principal amount.
Option
Class
C The call class holder’s right to exercise the call will
be subject to several conditions. First, the call class
holder can exercise the call only after expiration of
R a lock-out period, which is generally one year after
issuance. Also, the call cannot be exercised unless
the market price of the collateral that the call class
holder will receive is par or above at the time the
call is exercised.

Factor Availability
Factor availability is dependent on the underlying collateral of the Callable Passthrough Security. For CPCs backed by Gold PC
securities, Giants, or Gold REMICs, factors will be disclosed for the callable classes on or about the fifth business day of each
month. For CPCs backed by GNMA collateral, factors will be disclosed for the callable classes on or about the ninth business
day of the month.
Tax Issues
For a discussion on tax issues, see Freddie Mac’s “Focus on Tax Considerations of Callable REMIC Classes” in the Offering
Circular.

Record/Payment Date
Freddie Mac will pay principal and interest for callable REMIC classes that use Gold PCs as collateral for the CPCs on the 15th
of each month, to the holder of record as of the close of business on the last day of the month prior to payment. Generally, for
CPCs that use GNMA pools as collateral, Freddie Mac will pay principal and interest on the second business day after the 15th
calendar day of each month to the holder of record as of the close of business on the last day of the month prior to payment;
however, the payment date may vary per transaction.

Customer Support:
Freddie Mac takes pride in providing timely customer support. A variety of resources are available to provide investors with the
most comprehensive information about their gold PC securities.

Investor Inquiry (800) 336-3672; Investor_Inquiry@FreddieMac.com:

Knowledgeable securities information specialists are available from 9:00 a.m. to 5:00 p.m., Eastern Standard Time, and will:

✓
❏ Answer questions about Freddie Mac Gold PC securities and structured products
✓
❏ Explain how to access factors and coupons for existing mortgage securities as well

www.FreddieMac.com/mbs:
A convenient and easy-to-use single source of information for the mortgage securities community, Freddie Mac’s mortgage
securities website provides quality information about Freddie Mac securities, including:

• Details about our products

• Product-specific CUSIP lookup
• Mortgage securities data and subscription services
• Legal documentation and tax information for mortgage securities

FMAC <GO>:
A wide range of information and data is available on Freddie Mac’s Bloomberg site. View recently priced REMICs, collateral
availability, reference pools, callable REMIC supply, estimated REMIC production, and other mortgage securities issuance
reports. Product information, structured product fees, announcements regarding Freddie Mac’s passthrough and REMIC products.
PC prefixes are also available.
 To execute a Callable REMIC:
Contact a Freddie Mac Transaction Manager at (866) 903-2767 or one of our REMIC dealers:

Banc of America LLC

Bear Stearns & Co. Inc.
CS First Boston Corporation
Countrywide Securities
First Tennessee National Corporation
Freddie Mac SS&TG
Goldman Sachs & Co.
Greenwich Capital Markets, Inc.
J.P. Morgan Chase & Co.
Lehman Brothers
Merrill Lynch & Co.
Morgan Keegan & Co., Inc.
Morgan Stanley
Nomura Securities
Salomon Smith Barney
UBS Warburg LLC

For additional information about Freddie Mac’s Callable REMICs,

www.freddiemac.com/mbs
contact a Transaction Manager at (866) 903-2767.

This fact sheet is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable
offering circulars and related supplements, which incorporate Freddie Mac’s information statement and related supplements. Publication FS029
Updated August 2003