Fannie Mae 2008 Annual Report Download - page 217

“Interest-only loan” refers to a mortgage loan that allows the borrower to pay only the monthly interest due,
and none of the principal, for a fixed term. After the end of that term the borrower can choose to refinance,
pay the principal balance in a lump sum, or begin paying the monthly scheduled principal due on the loan,
which results in a higher monthly payment at that time. Interest-only loans can be adjustable-rate or fixed-rate
mortgage loans.
“Interest rate swap” refers to a transaction between two parties in which each agrees to exchange payments
tied to different interest rates or indices for a specified period of time, generally based on a notional principal
amount. An interest rate swap is a type of derivative.
“Intermediate-term mortgage” refers to a mortgage loan with a contractual maturity at the time of purchase
equal to or less than 15 years.
“LIHTC partnerships” refer to low-income housing tax credit limited partnerships or limited liability
companies.
“Loans,” “mortgage loans” and “mortgages” refer to both whole loans and loan participations, secured by
residential real estate, cooperative shares or by manufactured housing units.
“Loan-to-value ratio” or “LTV ratio” refers to the ratio, at any point in time, of the unpaid principal amount
of a borrower’s mortgage loan to the value of the property that serves as collateral for the loan (expressed as a
percentage).
“Modification” refers to a change to the original mortgage terms, which may include a change to the product
type (ARM or fixed-rate), interest rate, amortization term, maturity date and/or unpaid principal balance.
“Mortgage assets,” when referring to our assets, refers to both mortgage loans and mortgage-related securities
we hold in our investment portfolio.
“Mortgage credit book of business” refers to the sum of the unpaid principal balance of: (1) mortgage loans
held in our mortgage portfolio; (2) Fannie Mae MBS held in our mortgage portfolio; (3) non-Fannie Mae
mortgage-related securities held in our investment portfolio; (4) Fannie Mae MBS held by third parties; and
(5) other credit enhancements that we provide on mortgage assets.
“Mortgage-related securities” or “mortgage-backed securities” refer generally to securities that represent
beneficial interests in pools of mortgage loans or other mortgage-related securities. These securities may be
issued by Fannie Mae or by others.
“Multifamily guaranty book of business” refers to the sum of the unpaid principal balance of: (1) multifamily
mortgage loans held in our mortgage portfolio; (2) multifamily Fannie Mae MBS held in our mortgage
portfolio; (3) multifamily Fannie Mae MBS held by third parties; and (4) other credit enhancements that we
provide on multifamily mortgage assets. Excludes non-Fannie Mae mortgage-related securities held in our
investment portfolio for which we do not provide a guaranty.
“Multifamily mortgage loan” refers to a mortgage loan secured by a property containing five or more
residential dwelling units.
“Multifamily business volume” refers to the sum in any given period of the unpaid principal balance of:
(1) the multifamily mortgage loans we purchase for our investment portfolio; (2) the multifamily mortgage
loans we securitize into Fannie Mae MBS; and (3) credit enhancements that we provide on our multifamily
mortgage assets.
“Multifamily mortgage credit book of business” refers to the sum of the unpaid principal balance of:
(1) multifamily mortgage loans held in our mortgage portfolio; (2) multifamily Fannie Mae MBS held in our
mortgage portfolio; (3) multifamily non-Fannie Mae mortgage-related securities held in our investment
portfolio; (4) multifamily Fannie Mae MBS held by third parties; and (5) other credit enhancements that we
provide on multifamily mortgage assets.
“Negative-amortizing loan” refers to a mortgage loan that allows the borrower to make monthly payments that
are less than the interest actually accrued for the period. The unpaid interest is added to the principal balance
of the loan, which increases the outstanding loan balance. Negative-amortizing loans are typically adjustable-
rate mortgage loans.
212