Fannie Mae 2014 Annual Report Download - page 203

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FHFA, as conservator, approved the senior preferred stock purchase agreement and the amendments to the agreement, our
role as program administrator for the Home Affordable Modification Program and other initiatives under the Making Home
Affordable Program, and the housing finance agency transactions described below.
Treasury Senior Preferred Stock Purchase Agreement
We issued the warrant to Treasury pursuant to the terms of the senior preferred stock purchase agreement we entered into
with Treasury on September 7, 2008. Under the senior preferred stock purchase agreement, we also issued to Treasury one
million shares of senior preferred stock. We issued the warrant and the senior preferred stock as an initial commitment fee in
consideration of Treasury’s commitment to provide funds to us under the terms and conditions set forth in the senior
preferred stock purchase agreement. The senior preferred stock purchase agreement was subsequently amended on
September 26, 2008, May 6, 2009, December 24, 2009 and August 17, 2012. See “Business—Conservatorship and Treasury
Agreements—Treasury Agreements” for a description of the terms of the senior preferred stock purchase agreement, the
senior preferred stock and the warrant, including the revisions to the agreement and the senior preferred stock set forth in the
August 2012 amendment to the agreement.
As of December 31, 2014, we had received an aggregate of $116.1 billion from Treasury under the senior preferred stock
purchase agreement, and the remaining amount of funding available to us under the agreement was $117.6 billion. Through
December 31, 2014, we had paid an aggregate of $134.5 billion to Treasury in dividends on the senior preferred stock. We
expect to pay Treasury additional senior preferred stock dividends of $1.9 billion for the first quarter of 2015.
Treasury Making Home Affordable Program
In February 2009, the Obama Administration announced its Homeowner Affordability and Stability Plan, a plan to provide
stability and affordability to the U.S. housing market. Pursuant to this plan, in March 2009, the Administration announced the
details of its Making Home Affordable Program, a program intended to provide assistance to homeowners and prevent
foreclosures. One of the primary initiatives under the Making Home Affordable Program is the Home Affordable
Modification Program, or HAMP, which is aimed at helping borrowers whose loan is either currently delinquent or at
imminent risk of default by modifying their mortgage loan to make their monthly payments more affordable. In addition to
our participation in the Administration’s initiatives under the Making Home Affordable Program, Treasury engaged us to
serve as program administrator for loans modified under HAMP and other initiatives under the Making Home Affordable
Program pursuant to a financial agency agreement between Treasury and us, dated February 18, 2009. Our principal activities
as program administrator include:
• implementing the guidelines and policies of the Treasury program;
• preparing the requisite forms, tools and training to facilitate efficient loan modifications by servicers;
• creating, making available and managing the process for servicers to report modification activity and program
performance;
• calculating incentive compensation consistent with program guidelines;
• acting as record-keeper for executed loan modifications and program administration;
• coordinating with Treasury and other parties toward achievement of the program’s goals, including assisting with
development and implementation of updates to the program and initiatives expanding the program’s reach;
• helping servicers implement the program; and
• performing other tasks as directed by Treasury from time to time.
In June 2014, the Administration announced an extension of the Making Home Affordable Program until at least
December 31, 2016. We expect our role as program administrator will continue for some time after the termination of HAMP.
Under our arrangement with Treasury, Treasury has agreed to compensate us for a significant portion of the work we have
performed in our role as program administrator for HAMP and other initiatives under the Making Home Affordable Program.
We expect we will have received an aggregate of approximately $380 million from Treasury for our work as program
administrator from 2009 through 2014, as well as an additional amount of approximately $99 million for this period to be
passed through to third-party vendors engaged by us for HAMP and other initiatives under the Making Home Affordable
Program. We expect to continue to receive reimbursements from Treasury for our work as program administrator for HAMP
and other initiatives under the Making Home Affordable Program in future years, even after the termination of HAMP,
through the completion of our role as program administrator.