Fannie Mae 2014 Annual Report Download - page 98

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FHFA’s 2014 conservatorship scorecard required us to submit a portfolio plan to FHFA outlining how we will meet, even
under adverse conditions, the reductions in our portfolio required by our senior preferred stock purchase agreement with
Treasury. In connection with this portfolio plan, in October 2014, FHFA requested that we cap our portfolio each year at 90%
of the annual limit under our senior preferred stock purchase agreement with Treasury. FHFA’s request noted that we may
seek FHFA permission to increase this cap up to 95% of the annual limit under our senior preferred stock purchase agreement
with Treasury upon written request and with a documented basis for exception, such as changed market conditions. To
comply with FHFA’s request, we submitted a revised portfolio plan in October 2014 and reduced our mortgage portfolio to
$413.3 billion as of December 31, 2014, below the $422.7 billion cap requested by FHFA, and are required to reduce our
mortgage portfolio to $359.3 billion as of December 31, 2015.
As we reduce the size of our retained mortgage portfolio, our revenues generated by our retained mortgage portfolio will
decrease. For additional information on the terms of the senior preferred stock purchase agreement with Treasury, see
“Business—Conservatorship and Treasury Agreements—Treasury Agreements.”
Table 19 displays our Capital Markets group’s mortgage portfolio activity based on unpaid principal balance.
Table 19: Capital Markets Group’s Mortgage Portfolio Activity
For the Year Ended December 31,
2014 2013 2012
(Dollars in millions)
Mortgage loans:
Beginning balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 314,664 $ 371,708 $ 398,271
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,430 232,582 261,463
Securitizations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (131,576)(207,437)(211,455)
Liquidations and sales (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,908)(82,189)(76,571)
Mortgage loans, ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285,610 314,664 371,708
Mortgage securities:
Beginning balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,037 261,346 310,143
Purchases (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,885 36,848 26,874
Securitizations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,576 207,437 211,455
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (177,883)(278,421)(224,208)
Liquidations (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,912)(51,173)(62,918)
Mortgage securities, ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,703 176,037 261,346
Total Capital Markets group’s mortgage portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 413,313 $ 490,701 $ 633,054
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(1) Includes portfolio securitization transactions that do not qualify for sale treatment under GAAP.
(2) Includes scheduled repayments, prepayments, foreclosures, and lender repurchases.
(3) Includes purchases of Fannie Mae MBS issued by consolidated trusts.