Fannie Mae 2014 Annual Report Download - page 158

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not currently acquiring newly originated subprime loans, although we are acquiring refinancings of existing Fannie Mae
subprime loans in connection with our Refi Plus initiative. Unlike the loans they replace, these refinancings are not included
in our reported subprime loans because they do not meet our classification criteria for subprime loans. We have classified
private-label mortgage-related securities held in our retained mortgage portfolio as subprime if the securities were labeled as
such when issued. For more information on the subprime securities in our mortgage credit book of business, see “Note 5,
Investments in Securities.”
“Swaption” refers to an option that gives the option buyer the right, but not the obligation, to enter into an interest rate swap
on a future date with the option seller on terms specified on the date the parties agreed to the swaption.
“TCCA fees” refers to the expense recognized as a result of the 10 basis point increase in guaranty fees on all single-family
residential mortgages delivered to us on or after April 1, 2012 pursuant to the Temporary Payroll Tax Cut Continuation Act of
2011, which we remit to Treasury on a quarterly basis.
“Total loss reserve” consists of allowance for loan losses, allowance for accrued interest receivable, allowance for
preforeclosure property taxes and insurance receivables and reserve for guaranty losses. Our total loss reserve reflects our
estimate of the probable losses we have incurred in our guaranty book of business, including concessions we granted
borrowers upon modification of their loans.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Information about market risk is set forth in “MD&A—Risk Management—Market Risk Management, Including Interest
Rate Risk Management.”
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and notes thereto are included elsewhere in this annual report on Form 10-K as
described below in “Exhibits and Financial Statement Schedules.”
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
OVERVIEW
We are required under applicable laws and regulations to maintain controls and procedures, which include disclosure controls
and procedures as well as internal control over financial reporting, as further described below.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures refer to controls and other procedures designed to provide reasonable assurance that
information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and
procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated
to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding our required disclosure. In designing and evaluating our disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating and
implementing possible controls and procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, management has evaluated, with the participation of our Chief
Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as in effect as of
December 31, 2014, the end of the period covered by this report. As a result of management’s evaluation, our Chief