Fannie Mae 2008 Annual Report Download - page 215

GLOSSARY OF TERMS USED IN THIS REPORT
Terms used in this report have the following meanings, unless the context indicates otherwise.
“Alt-A mortgage loan” or “Alt-A loan” generally refers to a mortgage loan that can be underwritten with
reduced or alternative documentation than that required for a full documentation mortgage loan but may also
include other alternative product features. As a result, Alt-A mortgage loans generally have a higher risk of
default than non-Alt-A mortgage loans. In reporting our Alt-A exposure, we have classified mortgage loans as
Alt-A if the lenders that deliver the mortgage loans to us have classified the loans as Alt-A based on
documentation or other product features. We have classified private-label mortgage-related securities held in
our investment portfolio as Alt-A if the securities were labeled as such when issued.
“ARM” or “adjustable-rate mortgage” refers to a mortgage loan with an interest rate that adjusts periodically
over the life of the mortgage based on changes in a specified index.
“Available-for-sale securities” or “AFS securities” refers to investment securities we own that we have
designated as “available-for-sale” for accounting purposes, rather than as “held-to-maturity” or “trading.”
Unrealized gains and losses on AFS securities are recorded in stockholders’ equity as a component of
accumulated other comprehensive income (loss); these gains and losses are not recognized in our earnings
until they are realized.
“Business volume” or “new business acquisitions” refers to the sum in any given period of the unpaid
principal balance of: (1) the mortgage loans and mortgage-related securities we purchase for our investment
portfolio; and (2) the mortgage loans we securitize into Fannie Mae MBS that are acquired by third parties. It
excludes mortgage loans we securitize from our portfolio and the purchase of Fannie Mae MBS for our
investment portfolio.
“Buy-ups” refer to upfront payments we make to lenders to adjust the monthly contractual guaranty fee rate
on a Fannie Mae MBS so that the pass-through coupon rate on the MBS is in a more easily tradable
increment of a whole or half percent.
“Buy-downs” refer to upfront payments we receive from lenders to adjust the monthly contractual guaranty
fee rate on a Fannie Mae MBS so that the pass-through coupon rate on the MBS is in a more easily tradable
increment of a whole or half percent.
“Charge-off” refers to loan amounts written off as uncollectible bad debts. When repayment is considered
unlikely, these loan amounts are removed from our consolidated balance sheet and charged against our loss
reserves.
“Charter Act” or “our charter” refers to the Federal National Mortgage Association Charter Act, 12 U.S.C.
§ 1716 et seq.
“Conservator” refers to the Federal Housing Finance Agency, acting in its capacity as conservator of Fannie
Mae, to oversee Fannie Mae’s affairs in accordance with the Federal Housing Finance Regulatory Reform Act
of 2008 and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The powers of the
conservator are described in “Part I—Item 1—Business—Conservatorship, Treasury Agreements, Our Charter
and Regulation of Our Activities—Conservatorship.”
“Conventional mortgage” refers to a mortgage loan that is not guaranteed or insured by the U.S. government
or its agencies, such as the Department of Veterans Affairs, the Federal Housing Administration or the Rural
Development Housing and Community Facilities Program of the Department of Agriculture.
“Conventional single-family mortgage credit book of business” refers to the sum of the unpaid principal
balance of: (1) conventional single-family mortgage loans held in our mortgage portfolio; (2) conventional
single-family Fannie Mae MBS held in our mortgage portfolio; (3) conventional single-family non-Fannie Mae
mortgage-related securities held in our investment portfolio; (4) conventional single-family Fannie Mae MBS
held by third parties; and (5) other credit enhancements that we provide on conventional single-family
mortgage assets.
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