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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 05/07/2015
Entire Document
 


Investments in Mortgage-Related Securities
Our investments in mortgage-related securities are classified in our condensed consolidated balance sheets as either trading or available-for-sale and are measured at fair value. Table 18 displays the fair value of our investments in mortgage-related securities, including trading and available-for-sale securities, as of the dates indicated. We classify PLS as Alt-A, subprime or CMBS if the securities were labeled as such when issued. We have also invested in subprime private-label mortgage-related securities that we have resecuritized to include our guaranty (which we refer to as “wraps”).
Table 18: Summary of Mortgage-Related Securities at Fair Value
 
As of
 
March 31, 2015
 
December 31, 2014
 
(Dollars in millions)
Mortgage-related securities:
 
 
 
 
 
 
 
Fannie Mae
 
$
10,366

 
 
 
$
10,579

 
Freddie Mac
 
6,980

 
 
 
6,897

 
Ginnie Mae
 
672

 
 
 
642

 
Alt-A private-label securities
 
5,297

 
 
 
6,598

 
Subprime private-label securities
 
5,484

 
 
 
6,547

 
CMBS
 
3,848

 
 
 
3,912

 
Mortgage revenue bonds
 
4,302

 
 
 
4,745

 
Other mortgage-related securities
 
2,702

 
 
 
2,772

 
Total
 
$
39,651

 
 
 
$
42,692

 

The decrease in mortgage-related securities at fair value from December 31, 2014 to March 31, 2015 was primarily driven by sales of PLS in the first three months of 2015.
Mortgage Loans
The decrease in mortgage loans from December 31, 2014 to March 31, 2015 was primarily due to liquidations outpacing acquisition volumes. For additional information on our mortgage loans, see “Note 3, Mortgage Loans.” For additional information on the mortgage loan purchase and sale activities reported by our Capital Markets group, see “Business Segment Results—Capital Markets Group Results.”
The decrease in our allowance for loan losses from December 31, 2014 to March 31, 2015 was primarily due to our approach to adopting the charge-off provisions of the Advisory Bulletin on January 1, 2015. See “Consolidated Results of Operations—Credit-Related Income” for more information concerning the adoption of the Advisory Bulletin.
Debt
Debt of Fannie Mae is the primary means of funding our mortgage investments. The decrease in debt of Fannie Mae from December 31, 2014 to March 31, 2015 was primarily driven by lower funding needs, as our retained mortgage portfolio decreased. We provide a summary of the activity of the debt of Fannie Mae and a comparison of the mix between our outstanding short-term and long-term debt in “Liquidity and Capital Management—Liquidity Management—Debt Funding.” Also see “Note 8, Short-Term Borrowings and Long-Term Debt” for additional information on our outstanding debt.
Debt of consolidated trusts represents the amount of Fannie Mae MBS issued from consolidated trusts and held by third-party certificateholders. The increase in debt of consolidated trusts from December 31, 2014 to March 31, 2015 was primarily driven by sales of Fannie Mae MBS, which are accounted for as reissuances of debt of consolidated trusts in our condensed consolidated balance sheets, since the MBS certificate ownership is transferred from us to a third party.
Total Equity
Total equity decreased as of March 31, 2015 compared with December 31, 2014 due to our payment of senior preferred stock dividends to Treasury during the first quarter of 2015, partially offset by comprehensive income recognized during the first quarter of 2015.

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