Fannie Mae 2009 Annual Report Download - page 25

Business
Segment Primary Business Activities Primary Revenues Primary Expenses
Housing and
Community
Development
Business, or
HCD
•Mortgage securitizations:
Works with our lender
customers to securitize
multifamily mortgage loans
delivered to us by lenders
into Fannie Mae MBS
•Mortgage acquisitions:
Works with our Capital
Markets group to facilitate
the purchase of multifamily
mortgage loans for our
mortgage portfolio
•Affordable housing
investments: Provides
funding for investments in
affordable multifamily rental
and for-sale housing projects
•Credit risk management:
Prices and manages the
credit risk on loans in our
multifamily guaranty book of
business
•Credit loss management:
Works to prevent
foreclosures and reduce costs
of defaulted loans through
foreclosure alternatives,
through management REO
we acquire upon foreclosure
or through a deed-in-lieu of
foreclosure, and through
lender repurchase
evaluations.
•Guaranty fees: Compensation
for assuming and managing
the credit risk on our
multifamily guaranty book of
business
•Fee and other income:
Compensation received for
multifamily transactions and
bond credit enhancements
•Credit-related expenses:
Consists of provision for
credit losses and foreclosed
property expense on loans
underlying our multifamily
guaranty book of business
•Net operating losses:
Generated by our affordable
housing investments, net of
any tax benefits generated by
these investments that we are
able to utilize
•Administrative expenses:
Consists of salaries and
benefits, occupancy costs,
professional services, and
other expenses associated
with our HCD business
operations
Capital Markets • Mortgage and other
investments: Purchases
mortgage assets and makes
investments in other non-
mortgage interest-earning
assets
•Mortgage securitizations and
other customer services:
Issues structured Fannie Mae
MBS for customers in
exchange for a transaction
fee and provides other fee-
related services to our lender
customers
•Interest rate risk
management: Manages the
interest rate risk on our
portfolio by issuing a variety
of debt securities in a wide
range of maturities and
through the use of derivatives
•Net interest income:
Generated from the
difference between the
interest income earned on
our interest-earning assets
and the interest expense
associated with the debt
funding those assets
•Fee and other income:
Compensation received for
providing structured
transactions and other lender
services
•Fair value gains and losses:
Primarily consists of fair
value gains and losses on
derivatives and trading
securities
•Investment gains and losses:
Primarily consists of gains
and losses on the sale or
securitization of mortgage
assets
•Other-than-temporary
impairment: Consists of
impairment recognized on
our investments
•Administrative expenses:
Consists of salaries and
benefits, occupancy costs,
professional services, and
other expenses associated
with our Capital Markets
business operations
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