Fannie Mae 2013 Annual Report Download - page 96

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We remained the largest single issuer of mortgage related securities in the secondary market during 2013, with an estimated
market share of new single-family mortgage-related securities issuances, which excludes previously securitized mortgages, of
47% for 2013. Despite our continued high market share, our average single-family guaranty book of business remained
relatively flat in 2013 compared with 2012, primarily due to U.S. residential mortgage debt outstanding remaining relatively
flat.
2012 compared with 2011
Net income in 2012 compared with a net loss in 2011 was primarily due to credit-related income in 2012 compared with
credit-related expense in 2011, increased guaranty fee income in 2012 and a reduction in net interest loss in 2012.
Credit-related income in 2012 compared with credit-related expense in 2011 was driven primarily by a significant
improvement in the profile of our single-family book of business resulting from an increase in actual home prices.
Net interest loss decreased in 2012 compared with 2011 primarily due to a reduction in the amount of interest income not
recognized for nonaccrual mortgage loans in our consolidated balance sheet as we continued to complete a high number of
loan workouts and foreclosures. In addition, as loans with stronger credit profiles became a larger portion of our single-
family guaranty book of business, a smaller percentage of our loans became seriously delinquent in 2012 as compared with
2011.
Guaranty fee income increased in 2012 compared with 2011 due to an increase in the amortization of risk-based fees.
Additionally, as described above, in December 2011, Congress enacted the TCCA which, among other provisions, required
that we increase our single-family guaranty fees by at least 10 basis points and remit this increase to Treasury, rather than
retaining the incremental revenue.
In addition, single-family net income increased as a result of our resolution agreements with Bank of America related to
repurchase requests and compensatory fees. These agreements led to the recognition of $1.3 billion in pre-tax income for
2012.
Multifamily Business Results
Multifamily business results primarily reflect our multifamily guaranty business. Our multifamily business results also
include activity relating to our low-income housing tax credit (“LIHTC”) investments and equity investments. Although we
are no longer making new LIHTC or equity investments, we continue to make contractually required contributions for our
legacy investments. Activity from multifamily products is also reflected in the Capital Markets group results, which include
net interest income related to multifamily loans and securities held in our retained mortgage portfolio, gains and losses from
the sale of multifamily Fannie Mae MBS, mortgage loans and re-securitizations, and other miscellaneous income.
Table 21 displays the financial results of our Multifamily business for the periods indicated. The primary sources of revenue
for our Multifamily business are guaranty fee income and fee and other income. Expenses and other items that impact income
or loss primarily include credit-related income (expense) and administrative expenses.