Freddie Mac Announces Agreement To Settle ERISA Class Action Litigation

August 21, 2006

McLean, VA – Freddie Mac (NYSE: FRE) has reached aproposed settlement resolving the Employee Retirement Income Security Act (ERISA) class action litigation that was filed following the company’s restatement of financial results for the years 2000 through 2002. The proposed settlement includes a payment of $4.65 million without any admission of wrongdoing.

“Today’s proposed settlement further demonstrates our commitment to resolving past issues so that we can maintain our focus on achieving our mission, serving our customers and running our business well,” said Richard F. Syron, Freddie Mac’s chairman and chief executive officer.

The payment will be fully covered by insurance. The proposed settlement is subject to the negotiation and execution of final documentation and preliminary and final approval by the court.

In anticipation of the proposed settlement, the Department of Labor informed Freddie Mac that it has closed its investigation of Freddie Mac’s Thrift/401(k) Savings Plan. The Department has indicated that it will consider whether further action is warranted if the settlement is not finalized, approved, and implemented as proposed.

Freddie Mac has agreed to retain an independent fiduciary to review and approve the settlement and plan for the allocation of settlement proceeds. In addition, the company has agreed to conduct voluntary seminars to educate employees about investing and the importance of asset diversification, and to amend the Thrift/401(k) Savings Plan to appoint an independent fiduciary to oversee the Freddie Mac Stock Fund, one of the investment options under the plan. The company has also agreed to provide additional education to employee ERISA-fiduciaries regarding their obligations under ERISA.

Freddie Mac


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro, based in Raleigh, NC, offers a mature suite of products, designed specifically for the closing and title industry. Our mission is to serve our client base, with best-in-class products and services. Our products are modular so we don't force you to buy anything you don't need. You can always add on as your business grows. Unlike other software companies, we view the sale as the beginning of the relationship rather than the end. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.