Fannie Mae 2006 Annual Report Download - page 37

• our ability to issue debt securities in sufficient quantity and at attractive rates to fund our investments;
• our ability to maintain our current credit ratings;
• failure of our institutional counterparties to perform their obligations;
• changes in pricing or valuation methodologies, models, assumptions, estimates or other measurement
techniques;
• changes in general economic conditions, primarily the U.S. residential housing market;
• borrower preferences for fixed-rate mortgages or ARMs;
• investor preferences for mortgage loans and mortgage-backed securities rather than other instruments;
• our estimates regarding our 2006 and 2007 business results and market share;
• our belief that we met our 2006 housing goals and subgoals;
• our expectation that meeting our housing goals in 2007 and 2008 will continue to present challenges;
• our belief that home prices are likely to continue to decline in 2007;
• our expectation that our credit loss ratio in 2007 will increase to what we believe represents our more
normal historical range of 4 to 6 basis points;
• our expectation that multifamily property vacancy rates will increase;
• our expectation that losses on certain guaranty contracts will more than double in 2007 compared to 2006;
• our expectation of continued increased investments in goals-targeted products in 2007;
• our expectation that we will continue to invest in LIHTC partnerships;
• our expectation that, for the Capital Markets group, in normal market conditions, our selling activity will
represent a modest portion of the total change in the total portfolio for the year;
• our expectation that we will reduce our administrative expenses by $200 million in 2007 compared to
2006; and
• our expectation that our ongoing daily operations costs will be reduced to approximately $2 billion in
2008.
Readers are cautioned not to place undue reliance on forward-looking statements in this report or that we
make from time to time, and to consider carefully the factors discussed in “Item 1A—Risk Factors” in
evaluating these forward-looking statements. These forward-looking statements are representative only as of
the date they are made, and we undertake no obligation to update any forward-looking statement as a result of
new information, future events or otherwise except as required under the federal securities laws.
Item 1A. Risk Factors
This section identifies specific risks that should be considered carefully in evaluating our business. The risks
described in “Company Risks” are specific to us and our business, while those described in “Risks Relating to
Our Industry” relate to the industry in which we operate. Any of these risks could adversely affect our
business, results of operations, cash flow or financial condition. We believe that these risks represent the
material risks relevant to us, our business and our industry, but new material risks to our business may emerge
that we are currently unable to predict. The risks discussed below could cause our actual results to differ
materially from our historical results or the results contemplated by the forward-looking statements contained
in this report.
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