Fannie Mae 2014 Annual Report Download - page 47

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strength, liquidity and operational capacity of many of these smaller or non-depository mortgage sellers and servicers may
negatively affect their ability to satisfy their repurchase or compensatory fee obligations or to service the loans on our behalf.
The decrease in the concentration of our business with large depository financial institutions could increase both our
institutional counterparty credit risk and our mortgage credit risk and, as a result, could have a material adverse effect on our
business, results of operations, financial condition, liquidity and net worth.
See “Risk Factors” for a discussion of risks relating to our institutional counterparties, changes in the mortgage industry and
our acquisition of a significant portion of our mortgage loans from several large mortgage lenders.
COMPETITION
We compete to acquire mortgage assets in the secondary market. We also compete for the issuance of mortgage-related
securities to investors. Competition in these areas is affected by many factors, including the number of residential mortgage
loans offered for sale in the secondary market by loan originators and other market participants, the nature of the residential
mortgage loans offered for sale (for example, whether the loans represent refinancings), the current demand for mortgage
assets from mortgage investors, the interest rate risk investors are willing to assume and the yields they will require as a
result, and the credit risk and prices associated with available mortgage investments.
Competition to acquire mortgage assets is significantly affected by both our and our competitors’ pricing and eligibility
standards, as well as investor demand for our and our competitors’ mortgage-related securities. Any future changes in our
guaranty fees would likely affect our competitive environment. See “Our Charter and Regulation of Our Activities—Potential
Changes to Our Single-Family Guaranty Fee Pricing” for more information on potential future changes in our guaranty fees.
Our competitive environment also may be affected by many other factors in the future, such as new legislation or regulations.
See “Housing Finance Reform,” “Our Charter and Regulation of Our Activities” and “Risk Factors” for information on
legislation and regulations that could affect our business and competitive environment.
Our competitors for the acquisition of single-family mortgage assets are financial institutions and government agencies that
manage residential mortgage credit risk or invest in residential mortgage loans, including Freddie Mac, FHA, the VA, Ginnie
Mae (which primarily guarantees securities backed by FHA-insured loans and VA-guaranteed loans), the twelve FHLBs, U.S.
banks and thrifts, securities dealers, insurance companies, pension funds, investment funds and other mortgage investors. Our
primary competitors for the issuance of single-family mortgage-related securities are Freddie Mac and Ginnie Mae, as many
private market competitors dramatically reduced or ceased their activities in the single-family secondary mortgage market
following the 2008 housing crisis. For the issuance of multifamily mortgage-related securities, we primarily compete with
Freddie Mac, life insurers, U.S. banks and thrifts, other institutional investors, Ginnie Mae and private-label issuers of
commercial mortgage-backed securities.
Although our market share of single-family mortgage acquisitions remained high in 2014 as we continued to meet the needs
of the single-family mortgage market, our market share declined from 2013. We estimate that our single-family market share
was 32% in 2014, compared with 39% in 2013. These amounts represent our single-family mortgage acquisitions for each
year, excluding delinquent loans we purchased from our MBS trusts, as a percentage of the single-family first-lien mortgages
we currently estimate were originated in the United States that year. Because our estimate of mortgage originations in prior
periods is subject to change as additional data become available, these market share estimates may change in the future,
perhaps materially. We remained the largest single issuer of mortgage-related securities in the secondary market in 2014 in
the absence of substantial issuances of mortgage-related securities by private institutions during the year.
We also compete for low-cost debt funding with institutions that hold mortgage portfolios, including Freddie Mac and the
FHLBs.
EMPLOYEES
As of January 31, 2015, we employed approximately 7,600 personnel, including full-time and part-time employees, term
employees and employees on leave.