In the letter documenting the cease and desist proceedings against Freddie Mac, OFHEO director Armando Falcon Jr. concluded that, "Freddie Mac engaged in conduct that does not conform with the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, OFHEO rules, guidances and standards, and the Federal Home Loan Mortgage Corp. Act, and that such conduct has resulted in harm to Freddie Mac." For its part, in agreeing to the issuance of the order, Freddie Mac declined to admit or deny any wrongdoing specified in the order.

The order also calls for Freddie Mac to rectify any pertinent issues in the areas of governance, corporate culture, internal controls, accounting practices, disclosure and oversight. "This settlement and the resulting reforms represent an important step toward the goal of restoring the full confidence of our investors and the public," Freddie Mac chairman Shaun F. O'Malley says. "The reforms to be implemented as part of today's settlement build upon and enhance the company's ongoing remediation program to address its accounting and disclosure weaknesses." Freddie Mac is due to submit its first quarterly progress report to OFHEO on March 15, 2004.