Fannie Mae 2004 Annual Report Download - page 304

mortgage-backed trust transactions, $3.7 billion and $3.8 billion in asset-backed trust transactions, and
$5.1 billion and $7.0 billion in limited partnership investments, respectively.
In the aggregate, as of December 31, 2004, these VIEs have assets approximating $33.8 billion and our
maximum exposure to loss from these entities approximated $24.1 billion, which represents the greater of our
recorded investment in the entity or the unpaid principal balance of the assets that are covered by our guaranty.
If a payment was required for certificates that received the benefit of the guarantee, our maximum loss would
also include the interest that was accrued but had not been paid.
Other Consolidation Matters
We own mortgage-backed securities as of December 31, 2004 that are not traded on the book entry system
and were issued by two trusts exempt from FIN 46R because, after making an exhaustive effort, we were
unable to obtain the information to determine whether we are the primary beneficiary. As of December 31,
2004, our maximum exposure to loss for these entities was approximately $50 million. During the years ended
December 31, 2004 and 2003, we received principal and interest payments on these investments of $13 million
and $18 million, respectively.
4. Mortgage Loans
We have mortgage loans that are both HFI and HFS. These mortgage loans consist of single-family loans,
which are secured by four or fewer residential dwelling units, and multifamily loans, which are secured by
five or more residential dwelling units. HFI loans are reported at the unpaid principal amount outstanding, net
of unamortized premiums and discounts, deferred price adjustments, and an allowance for loan losses. HFS
loans are reported at the lower of cost or market determined on a pooled basis, with valuation changes
recorded in the consolidated statements of income.
The table below displays the product characteristics of both HFI and HFS loans in our mortgage portfolio as
of December 31, 2004 and 2003, and does not include loans underlying a security that is not consolidated,
since in those instances the mortgage loans are not included in the consolidated balance sheets. Refer to
“Note 7, Portfolio Securitizations” for additional information on mortgage loans underlying our securities.
2004 2003
As of December 31,
(Restated)
(Dollars in millions)
Single-family:
(1)
Government insured or guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,112 $ 7,284
Conventional:
Long-term fixed-rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,585 250,915
Intermediate-term fixed-rate
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,640 85,130
Adjustable-rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,350 19,155
Total conventional single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345,575 355,200
Total single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355,687 362,484
Multifamily:
(1)
Government insured or guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,074 1,204
Conventional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,396 33,945
Total multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,470 35,149
Unamortized premiums (discounts) and deferred price adjustments, net . . . . . . . . . . . . . 1,647 1,768
Lower of cost or market adjustments on loans held for sale . . . . . . . . . . . . . . . . . . . . . (83) (50)
Allowance for loan losses for loans held for investment. . . . . . . . . . . . . . . . . . . . . . . . (349) (290)
Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $401,372 $399,061
(1)
Loan data is shown at the unpaid principal balance and includes $152.7 billion and $162.5 billion of mortgage-related
securities that were consolidated as loans as of December 31, 2004 and 2003, respectively.
(2)
Intermediate-term fixed-rate consists of mortgage loans with contractual maturities at purchase equal to or less than
15 years.
F-53
FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)