Fannie Mae 2004 Annual Report Download - page 38

FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements, which are statements about matters that are not historical or
current facts. In addition, our senior management may from time to time make forward-looking statements orally
to analysts, investors, the news media and others. Forward-looking statements often include words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “would,” “should,” “could,”
“may,” or similar words. Among the forward-looking statements in this report are statements relating to:
• our intent to submit an updated business plan to OFHEO in early 2007 that may include a request for
modest growth in our mortgage portfolio;
• our expectations regarding industry and economic trends, including our expectations that:
• growth in total U.S. residential mortgage debt outstanding will continue at a slower pace in 2007, as
the housing market continues to cool and home price gains moderate further or decline modestly;
• the continuation of positive demographic trends, such as stable household formation rates, will help
mitigate the slowdown in the growth in residential mortgage debt outstanding, but are unlikely to
completely offset the slowdown in the short- to medium-term;
• there is a possibility of a modest decline in national home prices in 2007;
• our belief that demographic factors (such as stable household formation rates, a positive age structure
of the population for homebuying and rising homeownership rates due to the high level of
immigration over the past 25 years) that suggest a fundamentally strong mortgage market will
support continued long-term demand for new capital to finance the substantial and sustained housing
finance needs of American homebuyers;
• our credit losses will increase and serious delinquencies may trend upward, as a result of the sharp
decline in the rate of home price appreciation during 2006 and the possibility of modest home price
declines in 2007;
• our expectation that we will have finalized and substantially completed implementation of new policies
and procedures to strengthen risk management practices relating to AD&C business by December 2006;
• our expectation that, when we expect to earn returns greater than our cost of equity capital, we generally
will be an active purchaser of mortgage loans and mortgage-related securities, and that when few
opportunities exist to earn returns above our cost of equity capital, we generally will be a less active
purchaser, and may be a net seller, of mortgage loans and mortgage-related securities;
• our expectation that we will be an active purchaser of less liquid forms of mortgage loans and mortgage-
related securities even in periods of high market demand for mortgage assets;
• our expectation that private-label issuers of mortgage-related securities will continue to provide significant
competition for our Single-Family and HCD businesses;
• our belief that major elements of the restatement, including our comprehensive review of our accounting
policies and practices, will contribute to a more expeditious completion of financial statements for the
years ended December 31, 2005 and 2006;
• our belief that the estimated fair value of our derivatives may fluctuate substantially from period to period
because of changes in interest rates, expected interest rate volatility and our derivative activity;
• our expectation that, based on the composition of our derivatives, we generally expect to report decreases
in the aggregate fair value of our derivatives as interest rates decrease;
• our expectation that, as a result of the variety of ways in which we record financial instruments in our
consolidated financial statements, our earnings will vary, perhaps substantially, from period to period and
result in volatility in our stockholders’ equity and regulatory capital;
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