Fannie Mae 2008 Annual Report Download - page 15

and other credit enhancements that we provide on single-family mortgage assets. Excludes non-Fannie Mae
mortgage-related securities held in our investment portfolio for which we do not provide a guarantee.
(2)
Calculated based on number of loans. We include all of the conventional single-family loans that we own and that
back Fannie Mae MBS in the calculation of the single-family delinquency rate.
(3)
Represents the total amount of nonaccrual loans, troubled debt restructurings, and first-lien loans associated with
unsecured HomeSaver Advance loans inclusive of troubled debt restructurings and HomeSaver Advance first-lien
loans on accrual status. A troubled debt restructuring is a modification to the contractual terms of a loan that results
in a concession to a borrower experiencing financial difficulty.
(4)
Represents unpaid principal balance of nonperforming loans in our outstanding and unconsolidated Fannie Mae MBS
held by third parties, including first-lien loans associated with unsecured HomeSaver Advance loans that are not
seriously delinquent.
(5)
Reflects the number of single-family foreclosed properties we held in inventory as of the end of each period.
(6)
Includes deeds in lieu of foreclosure.
(7)
Modifications include troubled debt restructurings and other modifications to the contractual terms of the loan that do
not result in concessions to the borrower. A troubled debt restructuring involves some economic concession to the
borrower, and is the only form of modification in which we do not expect to collect the full original contractual
principal and interest amount due under the loan, although other resolutions and modifications may result in our
receiving the full amount due, or certain installments due, under the loan over a period of time that is longer than the
period of time originally provided for under the loans.
(8)
Represents number of first-lien loans associated with unsecured HomeSaver Advance loans.
(9)
Consists of the provision for credit losses and foreclosed property expense.
(10)
Consists of (a) charge-offs, net of recoveries and (b) foreclosed property expense for the reporting period. Interest
forgone on single-family nonperforming loans in our mortgage portfolio is not reflected in our credit losses total. In
addition, other-than-temporary impairment losses resulting from deterioration in the credit quality of our mortgage-
related securities and accretion of interest income on single-family loans subject to SOP 03-3 are excluded from
credit losses.
Through December 31, 2008, our Alt-A loans, as well as certain other higher risk loans, loans on properties in
particular states, and loans originated in 2006 and 2007, contributed disproportionately to our worsening credit
statistics. At this time, however, we are observing higher delinquency rates across our broader guaranty book
of business as well.
Net Worth and Fair Value Deficit
Net Worth and Fair Value Deficit Amounts
Under our senior preferred stock purchase agreement with Treasury, Treasury generally has committed to provide
us funds of up to $100 billion, on a quarterly basis, in the amount, if any, by which our total liabilities exceed our
total assets, as reflected on our consolidated balance sheet, prepared in accordance with GAAP, for the applicable
fiscal quarter. On February 18, 2009, in connection with the announcement of HASP, Treasury announced that it
is amending the senior preferred stock purchase agreement with us to (1) increase its funding commitment from
$100 billion to $200 billion, and (2) increase the size of our mortgage portfolio allowed under the agreement by
$50 billion to $900 billion, with a corresponding increase in the allowable debt outstanding. In connection with
announcing Treasury’s planned amendments to the senior preferred stock purchase agreement, Secretary Geithner
stated that “Fannie Mae and Freddie Mac are critical to the functioning of the housing finance system in this
country and play a key role in making mortgage rates affordable and maintaining the stability and liquidity of our
mortgage market” and that “[t]he increased funding will provide forward-looking confidence in the mortgage
market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability
for responsible homeowners.” Because an amended agreement has not been executed as of the date of this report,
the following discussion of the senior preferred stock purchase agreement, as well as references to that agreement
throughout this report, refer to the terms of the existing agreement, without reflecting these changes. We describe
the terms of the senior preferred stock purchase agreement in more detail in “Conservatorship, Treasury
Agreements, Our Charter and Regulation of Our Activities—Treasury Agreements.”
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