Fannie Mae 2009 Annual Report Download - page 368

The following table displays the regional geographic concentration of single-family and multifamily loans in
our mortgage portfolio and those loans held or securitized in Fannie Mae MBS as of December 31, 2009 and
2008.
2009 2008 2009 2008
As of December 31, As of December 31,
Percentage of
Single-Family Guaranty
Book of Business
(2)
Percentage of
Multifamily Guaranty
Book of Business
(3)
Geographic Concentration
(1)
Midwest................................. 16% 16% 9% 9%
Northeast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 19 23 23
Southeast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 25 19 19
Southwest ............................... 15 16 15 15
West ................................... 26 24 34 34
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100%
(1)
Midwest includes IL, IN, IA, MI, MN, NE, ND, OH, SD, WI; Northeast includes CT, DE ME, MA, NH, NJ, NY, PA,
PR, RI, VT, VI; Southeast includes AL, DC, FL, GA, KY, MD, NC, MS, SC, TN, VA, WV; Southwest includes AZ,
AR, CO, KS, LA, MO, NM, OK, TX, UT; West include AK,CA,GU,HI,ID,MT,NV,OR,WA and WY.
(2)
Consists of the portion of our single-family conventional guaranty book of business for which we have detailed loan
level information, which constituted over 98% and 99% of our total single-family conventional guaranty book of
business as of December 31, 2009 and 2008, respectively.
(3)
Consists of the portion of our multifamily guaranty book of business for which we have detailed loan level
information, which constituted over 98% and 99% of our total multifamily guaranty book of business as of
December 31, 2009 and 2008, respectively.
Non-traditional Loans; Alt-A and Subprime Loans and Securities
We own and guarantee loans with non-traditional features, such as interest-only loans and negative-amortizing
loans. We also own and guarantee Alt-A and subprime mortgage loans and mortgage-related securities. An
Alt-A mortgage loan generally refers to a mortgage loan that has been 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. A subprime mortgage loan generally
refers to a mortgage loan made to a borrower with a weaker credit profile than that of a prime borrower. As a
result of the weaker credit profile, subprime borrowers are more likely to default than prime borrowers.
Subprime mortgage loans are typically originated by lenders specializing in this type of business or by
subprime divisions of large lenders, using processes unique to subprime loans. In reporting our subprime
exposure, we have classified mortgage loans as subprime if the mortgage loans were originated by one of
these specialty lenders or a subprime division of a large lender. We have classified private-label mortgage-
related securities held in our investment portfolio as subprime if the securities were labeled as such when
issued. We reduce our risk associated with some of these loans through credit enhancements, as described
below under “Mortgage Insurers.”
F-110
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)