Fannie Mae 2008 Annual Report Download - page 413

23. Subsequent Events
Homeowner Affordability and Stability Plan
On February 18, 2009, the Obama Administration announced a Homeowner Affordability and Stability Plan
(“HASP”). We will play a role in administering the HASP on behalf of Treasury. Under the plan, we will
work with our servicers to offer certain borrowers loan modifications that reduce their monthly payments of
principal and interest on their mortgages. The HASP modification program includes incentives to servicers,
mortgage holders and borrowers to modify loans in an effort to bring them to affordable levels and prevent
foreclosures. In addition, under HASP, we will launch a streamlined refinancing program that will allow
borrowers with current loan-to-value ratios up to 105% to refinance their loans to a lower rate without
obtaining new mortgage insurance. Due to the unprecedented nature of these programs, it is difficult for us to
predict the full extent of our activities under the program and how those will impact us, the response rates we
will experience, or the costs that we will incur. However, to the extent that our servicers and borrowers
participate in these programs in large numbers, it is likely that the costs we incur associated with the
modifications of loans in our guaranty book of business, as well as the borrower and servicer incentive fees
associated with them, will be substantial, and these programs would therefore likely have a material adverse
effect on our business, results of operations, financial condition and net worth.
Announced Amendments to Treasury Senior Preferred Stock Purchase Agreement
On February 18, 2009, Treasury announced that it is amending the senior preferred stock purchase agreement
with us to (1) increase its funding commitment from $100.0 billion to $200.0 billion, and (2) increase the size
of our mortgage portfolio allowed under the agreement by $50.0 billion to $900.0 billion, with a
corresponding increase in the allowable debt outstanding. As of February 26, 2009, an amended agreement
had not been executed.
F-135
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)