Fannie Mae 2010 Annual Report Download - page 10

While national multifamily market fundamentals improved during 2010, certain local markets and properties
continue to exhibit weak fundamentals. As a result, we expect that our multifamily nonperforming assets will
increase in certain areas and we may continue to experience an increase in delinquencies and credit losses
despite generally improving market fundamentals. We expect the multifamily sector to continue to improve
modestly in 2011, even though unemployment levels remain elevated.
EXECUTIVE SUMMARY
Please read this Executive Summary together with our Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”) and our consolidated financial statements as of
December 31, 2010 and related notes. This discussion contains forward-looking statements that are based
upon management’s current expectations and are subject to significant uncertainties and changes in
circumstances. Please review “Forward-Looking Statements” for more information on the forward-looking
statements in this report and “Risk Factors” for a discussion of factors that could cause our actual results to
differ, perhaps materially, from our forward-looking statements. Please also see “MD&A—Glossary of Terms
Used in This Report.”
Our Mission
Our public mission is to support liquidity and stability in the secondary mortgage market and increase the
supply of affordable housing. In connection with our public mission, FHFA, as our conservator, and the
Obama Administration have given us an important role in addressing housing and mortgage market conditions.
As we discuss below and elsewhere in “Business,” we are concentrating our efforts on supporting liquidity,
stability and affordability in the secondary mortgage market and minimizing our credit losses from delinquent
loans.
Our Business Objectives and Strategy
Our Board of Directors and management consult with our conservator in establishing our strategic direction,
taking into consideration our role in addressing housing and mortgage market conditions. FHFA has approved
our business objectives. We face a variety of different, and potentially conflicting, objectives including:
• minimizing our credit losses from delinquent mortgages;
• providing liquidity, stability and affordability in the mortgage market;
• providing assistance to the mortgage market and to the struggling housing market;
• limiting the amount of the investment Treasury must make under our senior preferred stock purchase
agreement;
• returning to long-term profitability; and
• protecting the interests of the taxpayers.
We therefore regularly consult with and receive direction from our conservator on how to balance these
objectives. Our pursuit of our mission creates conflicts in strategic and day-to-day decision-making that could
hamper achievement of some or all of these objectives.
We currently are concentrating our efforts on minimizing our credit losses. We use home retention solutions
and foreclosure alternatives to address delinquent mortgages, starting with solutions, such as modifications,
that permit people to stay in their homes. When there is no lower-cost alternative, our goal is to move to
foreclosure expeditiously. We also seek to minimize credit losses by actively managing our real estate owned
(“REO”) inventory and by pursuing contractual remedies where third parties such as lenders or providers of
credit enhancement are obligated to compensate us for losses.
Along with our efforts to minimize credit losses, we continue our significant role of providing support for
liquidity and affordability in the mortgage market through our guaranty and capital markets businesses. In
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