Fannie Mae 2006 Annual Report Download - page 8

F M 2006 A R
6
Expectations for 2007 and Beyond
We expect the housing and mortgage market correction to
continue through this year and next, and these trends will
affect our business and financial results this year.
Here’s an outlook for 2007:
• Webelieveourbookofbusinesswillgrowfasterthan
themarketweserveasborrowersrenanceintolonger-
termxed-ratemortgageloans–ourspecialty.
• Weexpectfurtherincreasesinthecostofourdebt,
which will cause a continued decline in net interest
income in 2007.
• Weexpectour
credit losses to
risein2007given
current market
conditions.
• Weexpectour
administrative
expenses to
decline in 2007.
• Weexpectcertain
accountingtreatmentstohaveamorepronounced
impact on some of our financial results, for example,
requiring us to take losses up front while
deferring gains.
WebelieveFannieMaeisinasolidpositiontocontinue
weathering the market turmoil as it continues through
2008. e mortgage market is returning to tighter
underwriting, more rational pricing, and more demand for
traditional,xed-andadjustable-rateproductsthathave
been our bread and butter. In other words, the market
isreturningtoaplacethatFannieMaeneverleft–safe,
sensible, affordable mortgage lending. As it does, we see
opportunities ahead for growth in our business and for
gain in market share.
Alltheworkwe’vedonesince2004hasmadeFannie
Maestrongerandbetterpreparedforthefuture.We’ve
rebuilt most of the
company. Our
business is regaining
market share. e
market demand
fortheservicewe
provideisgrowing.
Right now we are
focused on helping
our customers and
partnersbyprovidingaordability,liquidity,andstability
tothemarket–thejobCongresscharteredFannieMaeto
do.Forus,that’snotjustourmission–it’sourbusiness.
I will write to you again next spring in our 2007 annual
report with more information about where Fannie Mae is
heading in the future.
ank you for reading, and most of all, thank you for
sticking with us.
Daniel H. Mudd
at is our mission in good
timesandtoughtimes–to
provideaordability,stabilityand
liquidity to the market.