Fannie Mae 2007 Annual Report Download - page 23

PART I
Because of the complexity of our business and the industry in which we operate, we have included in this
annual report on Form 10-K a glossary under “Part II—Item 7—Management’s Discussion and Analysis of
Financial Condition and Results of Operations (“MD&A”)—Glossary of Terms Used in This Report.”
Item 1. Business
OVERVIEW
Fannie Mae’s activities enhance the liquidity and stability of the mortgage market and contribute to making
housing in the United States more affordable and more available to low-, moderate- and middle-income
Americans. These activities include providing funds to mortgage lenders through our purchases of mortgage
assets, and issuing and guaranteeing mortgage-related securities that facilitate the flow of additional funds into
the mortgage market. We also make other investments that increase the supply of affordable housing.
We are a government-sponsored enterprise (“GSE”) chartered by the U.S. Congress under the name “Federal
National Mortgage Association” and are aligned with national policies to support expanded access to housing
and increased opportunities for homeownership. We are subject to government oversight and regulation. Our
regulators include the Office of Federal Housing Enterprise Oversight (“OFHEO”), the Department of Housing
and Urban Development (“HUD”), the Securities and Exchange Commission (“SEC”), and the Department of
the Treasury.
Although we are a corporation chartered by the U.S. Congress, the U.S. government does not guarantee,
directly or indirectly, our securities or other obligations. We are a stockholder-owned corporation, and our
business is self-sustaining and funded exclusively with private capital. Our common stock is listed on the New
York Stock Exchange, and traded under the symbol “FNM.” Our debt securities are actively traded in the over-
the-counter market.
RESIDENTIAL MORTGAGE MARKET OVERVIEW
We operate in the U.S. residential mortgage market, specifically in the secondary mortgage market where
mortgages are bought and sold. We discuss below market and economic factors affecting our business and our
role in the secondary mortgage market.
Market and Economic Factors Affecting Our Business
Our business operates within the U.S. residential mortgage market, and therefore, we consider the amount of
U.S. residential mortgage debt outstanding to be the best measure of the size of our overall market. As of
September 30, 2007, the latest date for which information was available, the amount of U.S. residential
mortgage debt outstanding was estimated by the Federal Reserve to be approximately $11.8 trillion (including
$11.0 trillion of single-family mortgages). Our mortgage credit book of business, which includes mortgage
assets we hold in our investment portfolio, our Fannie Mae mortgage-backed securities (“Fannie Mae MBS”)
held by third parties and credit enhancements that we provide on mortgage assets, was $2.8 trillion as of
September 30, 2007, or approximately 23% of total U.S. residential mortgage debt outstanding.
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