Fannie Mae 2007 Annual Report Download - page 45

• our expectations that our single-family guaranty book of business will grow at a faster rate than the rate
of overall growth in U.S. residential mortgage debt outstanding, and our guaranty fee income will
continue to increase during 2008;
• our expectation that the fair value of our net assets will decline in 2008 from the estimated fair value of
$35.8 billion as of December 31, 2007;
• our belief that we will collect all original contractual principal and interest payments on the substantial
majority of our cured loans;
• our belief that our change in practice to decrease the number of optional delinquent loan purchases from
our single-family MBS trusts will not materially affect our reserve for guaranty losses;
• our expectation that our credit-related expenses and credit losses will continue to increase in 2008;
• our expectation that our actual future credit losses will be significantly less than the fair value of our
guaranty obligations;
• our expectation that the substantial majority of our MBS guaranty transactions will generate positive
economic returns over the lives of the related MBS because, based on our experience, we expect our
guaranty fees to exceed our incurred credit losses;
• our expectation of continued volatility in our results of operations and financial condition;
• our expectation that, based on the composition of our derivatives, we will experience derivatives losses
and decreases in the aggregate estimated fair value of our derivatives when interest rates decline;
• our expectation that changes in the fair value of our trading securities will generally move inversely to
changes in the fair value of our derivatives;
• our expectation that we may sell LIHTC investments in the future if we believe that the economic return
from the sale will be greater than the benefit we would receive from continuing to hold these investments;
• our expectation that we will use our remaining tax credits generated by our investments in housing tax
credit partnerships to reduce our federal income tax liability in future years, and our expectation that our
effective tax rate will continue to vary significantly from our 35% statutory rate;
• our belief that our delinquencies and foreclosures will increase in 2008;
• our belief that market conditions will offer us opportunities in 2008 to build a stronger competitive
position within our market;
• our belief that our sources of liquidity will remain adequate to meet both our short-term and long-term
funding needs;
• our estimated capital classification measures;
• our belief that we will maintain a sufficient amount of core capital to continue to meet our statutory and
OFHEO-directed minimum capital requirements through 2008;
• our expectation that housing, mortgage and credit market conditions will continue to negatively affect our
earnings and the amount of our core capital in 2008;
• our expectation that we may take one or more of the following actions to meet our regulatory capital
requirements if the current challenging market conditions are significantly worse than anticipated in 2008:
reducing the size of our investment portfolio through liquidations or by selling assets; issuing preferred,
convertible preferred or common stock; reducing or eliminating our common stock dividend; forgoing
purchase and guaranty opportunities; and changing our current business practices to reduce our losses and
expenses;
• our belief that we would be able to issue preferred securities in the future if necessary;
• our estimate of the effect of hypothetical declines in home prices on our credit losses; and
• our estimate of the effect of hypothetical changes in interest rates on the fair value of our financial
instruments.
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