Fannie Mae 2013 Annual Report Download - page 329

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FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-105
Control Group reviews the overall work performed and inspects a portion of the properties in major markets, for which the
third-party valuations are obtained, in order to assess the quality of the valuations.
We calibrate the performance of our proprietary distressed home price model using actual offers in recently observed
transactions. The model’s performance is reviewed on a monthly basis by the REO valuation team and compared quarterly to
specific model performance thresholds. The results of the validation are regularly reviewed with the VOC.
Our Property Valuation Review Group reviews appraisals and broker price opinions to determine the most appropriate value
by comparing data within these products with current comparable properties and market data. We conduct regular
performance reviews of the counterparties that provide products and services for this process. In addition, valuation results
and trend analyses are reviewed regularly by management responsible for valuing and disposing of real estate.
Fair Value of Financial Instruments
The following table displays the carrying value and estimated fair value of our financial instruments as of December 31, 2013
and 2012. The fair value of financial instruments we disclose includes commitments to purchase multifamily and single-
family mortgage loans, which are off-balance sheet financial instruments that we do not record in our consolidated balance
sheets. The fair values of these commitments are included as “Mortgage loans held for investment, net of allowance for loan
losses.” The disclosure excludes certain financial instruments, such as plan obligations for pension and postretirement health
care benefits, employee stock option and stock purchase plans, and also excludes all non-financial instruments. As a result,
the fair value of our financial assets and liabilities does not represent the underlying fair value of our total consolidated assets
and liabilities.