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Could Freddie Mac’s New CEO Appointment Reframe Its Long‑Term Risk Discipline Story for Investors (FMCC)?

Simply Wall St · 1d ago
  • Freddie Mac recently announced that its Board of Directors has appointed Kenny M. Smith, a veteran financial services executive with nearly 40 years of experience at firms such as Deloitte, as chief executive officer and board member, effective December 17, 2025.
  • Smith’s deep background in advising large banks on strategy, risk management and governance signals a potential shift in how Freddie Mac approaches oversight and operational discipline.
  • Next, we’ll examine how Smith’s extensive risk and governance expertise could influence Freddie Mac’s investment narrative and long‑term positioning.

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What Is Federal Home Loan Mortgage's Investment Narrative?

For Freddie Mac, the big-picture belief is that the company’s critical role in U.S. housing finance, combined with efforts to tighten risk controls, can ultimately justify owning an unprofitable but systemically important franchise. Investors have been willing to look past weak earnings and a loss-making profile, helped by strong multi‑year returns and a share price that still sits well below both analyst and community fair value estimates. The appointment of Kenny M. Smith as CEO and board member fits directly into the current short‑term catalysts: an overhauled, relatively new board, a focus on governance, and ongoing tech investments such as QC automation that aim to reduce credit defects and operating costs. Smith’s risk and governance background could slightly reweight the story toward balance sheet quality and regulatory alignment, but it does not fundamentally change the near‑term risks around continued losses, conservatorship, and share price volatility.

However, there is one governance-related risk that current and prospective shareholders should not overlook. Despite retreating, Federal Home Loan Mortgage's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

FMCC 1-Year Stock Price Chart
FMCC 1-Year Stock Price Chart
Five Simply Wall St Community fair value estimates stretch from US$11.94 to about US$119.21, underscoring how far apart private investors can be. Set against governance overhaul, persistent losses and upcoming leadership change, these differing views invite you to weigh several angles before forming an opinion.

Explore 5 other fair value estimates on Federal Home Loan Mortgage - why the stock might be a potential multi-bagger!

Build Your Own Federal Home Loan Mortgage Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.