Fannie Mae 2010 Annual Report Download - page 54

securities dealers, insurance companies, pension funds, investment funds and other investors. During 2008,
almost all of our competitors, other than Freddie Mac, FHA, Ginnie Mae and the FHLBs, ceased their
activities in the residential mortgage finance business, and we remained the largest single issuer of mortgage-
related securities in the secondary market in 2010.
We compete to acquire mortgage assets in the secondary market both for securitization into Fannie Mae MBS
and, to a significantly lesser extent, for our investment portfolio. We also compete for the issuance of
mortgage-related securities to investors. Competition in these areas is affected by many factors, including the
amount of residential mortgage loans offered for sale in the secondary market by loan originators and other
market participants, the nature of the residential mortgage loans offered for sale (for example, whether the
loans represent refinancings), the current demand for mortgage assets from mortgage investors, the interest
rate risk investors are willing to assume and the yields they will require as a result, and the credit risk and
prices associated with available mortgage investments.
Competition to acquire mortgage assets is significantly affected by pricing and eligibility standards. Changes
in our pricing and eligibility standards and in the eligibility standards of the mortgage insurance companies in
2008 and 2009 have reduced our acquisition of loans with higher LTV ratios and other high-risk features. In
addition, FHA has become the lower-cost option, or in some cases the only option, for loans with higher LTV
ratios.
During 2010, our primary competitors for the issuance of mortgage-related securities were Ginnie Mae and
Freddie Mac. Prior to the severe market downturn, there was a significant increase in the issuance of
mortgage-related securities by non-agency issuers, which caused a decrease in our share of the market for new
issuances of single-family mortgage-related securities from 2003 to 2006. Non-agency issuers, also referred to
as private-label issuers, are those issuers of mortgage-related securities other than agency issuers Fannie Mae,
Freddie Mac and Ginnie Mae. The subsequent mortgage and credit market disruption led to a significant
decline in the issuance of private-label mortgage-related securities. Accordingly, our market share significantly
increased during 2008 and has remained high since then. Our estimated market share of new single-family
mortgage-related securities issuances was 44.0% in 2010, compared with 46.3% in 2009, 45.4% in 2008, and
33.9% in 2007. Our estimated market share of 46.3% in 2009 includes $94.6 billion of whole loans held for
investment in our mortgage portfolio that were securitized into Fannie Mae MBS in the second quarter, but
retained in our mortgage portfolio and consolidated on our consolidated balance sheets. Excluding these
Fannie Mae MBS from the estimate of our market share, our estimated 2009 market share of new single-
family mortgage-related securities issuances was 43.2%.
We also compete for low-cost debt funding with institutions that hold mortgage portfolios, including Freddie
Mac and the FHLBs.
Although we do not know the structure that long-term GSE reform will ultimately take, we expect that, if our
company continues, we will face more competition in the future. Please see “Business—Legislation and GSE
Reform” for a discussion of proposals for GSE reform, as well as recent legislative reform of the financial
services industry that could affect our business.
EMPLOYEES
As of January 31, 2011, we employed approximately 7,300 personnel, including full-time and part-time
employees, term employees and employees on leave.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We make available free of charge through our Web site our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and all other SEC reports and amendments to those reports as soon
as reasonably practicable after we electronically file the material with, or furnish it to, the SEC. Our Web site
address is www.fanniemae.com. Materials that we file with the SEC are also available from the SEC’s Web
site, www.sec.gov. You may also request copies of any filing from us, at no cost, by calling the Fannie Mae
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