Fannie Mae 2014 Annual Report Download - page 301

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-86
dependent valuations. The related ranges and weighted averages are not meaningful when aggregated as they vary
significantly from property to property.
Fair Value Measurements
as of December 31,
Significant Valuation Techniques 2014 2013
(Dollars in millions)
Nonrecurring fair value measurements:
Mortgage loans held for sale, at lower of cost or fair value . . . . . . . . . Consensus $ 110 $ 132
Single-family mortgage loans held for investment, at amortized cost:
Of Fannie Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Internal Model 16,654 19,966
Of consolidated trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other 60 79
Total single-family mortgage loans held for investment, at
amortized cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,714 20,045
Multifamily mortgage loans held for investment, at amortized cost . Broker Price Opinions 45 248
Asset Manager Estimate 580 1,230
Other — 55
Total multifamily mortgage loans held for investment, at amortized
cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625 1,533
Acquired property, net:
Single-family. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accepted Offers 864 691
Appraisals 1,509 1,077
Walk Forwards 1,173 1,106
Internal Model 1,045 1,049
Other 191 118
Total single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,782 4,041
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Broker Price Opinions 127 9
Other 13 89
Total multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 98
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other 45 121
Total nonrecurring assets at fair value. . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,416 $ 25,970
We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The
following is a description of the valuation techniques we use for fair value measurement and disclosure as well as our basis
for classifying these measurements as Level 1, Level 2 or Level 3 of the valuation hierarchy in more specific situations.
Trading Securities and Available-for-Sale Securities
These securities are recorded in our consolidated balance sheets at fair value on a recurring basis. Fair value is measured
using quoted market prices in active markets for identical assets, when available.
We classify securities whose values are based on quoted market prices in active markets for identical assets as Level 1 of the
valuation hierarchy. We classify securities in active markets as Level 2 of the valuation hierarchy if quoted market prices in
active markets for identical assets are not available. For all valuation techniques used for securities where there is limited
activity or less transparency around these inputs to the valuation, these securities are classified as Level 3 of the valuation
hierarchy.
A description of our securities valuation techniques is as follows:
Single Vendor: This valuation technique utilizes one vendor price to estimate fair value. We generally validate these
observations of fair value through the use of a discounted cash flow technique whose unobservable inputs (for example,
default rates) are disclosed in the table above.
Dealer Mark: This valuation technique utilizes one dealer price to estimate fair value. We generally validate these
observations of fair value through the use of a discounted cash flow technique whose unobservable inputs (for example,
default rates) are disclosed in the table above.