Fannie Mae 2010 Annual Report Download - page 388

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Estimated
Fair
Value
Total
Losses
Fair Value Measurements
For the Year Ended December 31, 2008
For the Year
Ended
December 31, 2008
(Dollars in millions)
Assets:
Mortgage loans held for sale, at lower of cost or
fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $26,303 $ 1,294 $27,597
(1)
$ (433)
Mortgage loans held for investment, at amortized
cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,838 1,838
(3)
(107)
Acquired property, net . . . . . . . . . . . . . . . . . . . . . — — 9,624 9,624
(4)
(1,533)
Other assets:
Guaranty assets . . . . . . . . . . . . . . . . . . . . . . . . — — 5,473 5,473 (2,967)
Master servicing assets . . . . . . . . . . . . . . . . . . . — — 547 547 (553)
Partnership investments. . . . . . . . . . . . . . . . . . . — — 4,877 4,877 (764)
(6)
Total assets at fair value . . . . . . . . . . . . . . . . . . $— $26,303 $23,653 $49,956 $(6,357)
Liabilities:
Master servicing liabilities . . . . . . . . . . . . . . . . . . $— $ — $ 22 $ 22 $ (12)
Total liabilities at fair value. . . . . . . . . . . . . . . . $— $ — $ 22 $ 22 $ (12)
(1)
Includes $7.1 billion, $15.1 billion, and $25.2 billion of mortgage loans held for sale that were sold, retained as a
mortgage-related security or redesignated to mortgage loans held for investment as of December 31, 2010, 2009, and
2008, respectively.
(2)
Includes $7.1 billion of estimated fair value and $68 million in losses due to the adoption of the new accounting
standards.
(3)
Includes $3.4 billion, $1.1 billion and $157 million of mortgage loans held for investment that were redesignated to
mortgage loans held for sale, liquidated or transferred to foreclosed properties as of December 31, 2010, 2009, and
2008, respectively.
(4)
Includes $10.5 billion, $7.1 billion and $4.0 billion of acquired properties that were sold or transferred as of
December 31, 2010, 2009 and 2008, respectively.
(5)
Includes $22 million of other assets that were sold or transferred as of December 31, 2010.
(6)
Represents impairment charges related to LIHTC partnerships and other equity investments in multifamily properties.
We recognized other than temporary impairment losses of $16 million, $5.5 billion and $506 million related to LIHTC
partnerships for the years ended December 31, 2010, 2009 and 2008, respectively.
The following is a description of the fair valuation techniques we use for assets and liabilities measured at fair
value on a nonrecurring basis under the accounting standard for fair value measurements as well as our basis
for classifying these assets and liabilities as Level 1, Level 2 or Level 3. We also use these valuation
techniques to estimate the fair value of financial instruments not carried at fair value but disclosed as part of
the fair value of financial instruments.
Mortgage Loans Held for Sale “HFS”—HFS loans are reported at the lower of cost or fair value in our
consolidated balance sheets. At the transition date, we reclassified the majority of HFS loans to HFI, as the
trusts do not have the ability to sell mortgage loans and use of such loans is limited exclusively to the
settlement of obligations of the trust. The valuation methodology and inputs used in estimating the fair value
F-130
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)