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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 05/06/2011
Entire Document
 
Table of Contents

FANNIE MAE
(In conservatorship)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(UNAUDITED)
 
                                         
          For the Three
 
    Fair Value Measurements
    Months Ended
 
    For the Three Months Ended March 31, 2010     March 31, 2010  
    Quoted
                         
    Prices in
                         
    Active
    Significant
                   
    Markets for
    Other
    Significant
             
    Identical
    Observable
    Unobservable
    Estimated
       
    Assets
    Inputs
    Inputs
    Fair
    Total Gains
 
    (Level 1)     (Level 2)     (Level 3)     Value     (Losses)  
    (Dollars in millions)  
 
Assets:
                                       
Mortgage loans held for sale, at lower of cost or fair value
  $     $ 6,690     $ 473     $ 7,163 (1)(2)   $ (69 )(2)
Single-family mortgage loans held for investment, at amortized cost:
                                       
Of Fannie Mae
                3,621       3,621 (3)     109  
Multifamily mortgage loans held for investment, at amortized cost:
                                       
Of Fannie Mae
                1,089       1,089 (3)     (91 )
Acquired property, net:
                                       
Single-family
                5,827       5,827 (4)     (332 )
Multifamily
                73       73 (4)     (15 )
Other Assets:
                                       
Guaranty assets
                18       18       (3 )
Partnership investments
                69       69       (63 )
                                         
Total assets at fair value
  $     $ 6,690     $ 11,170     $ 17,860     $ (464 )
                                         
 
 
(1) Includes $7.1 billion of mortgage loans held for sale that were sold, retained as a mortgage-related security or redesignated to mortgage loans held for investment as of March 31, 2010.
 
(2) Includes $7.1 billion of estimated fair value and $68 million in losses due to the adoption of the new accounting standards.
 
(3) Includes $1.3 billion and $161 million of mortgage loans held for investment that were liquidated or transferred to foreclosed properties as of March 31, 2011 and 2010, respectively.
 
(4) Includes $4.1 billion and $1.6 billion of acquired properties that were sold or transferred as of March 31, 2011 and 2010, respectively.
 
The following is a description of the fair valuation techniques we use for assets and liabilities measured at fair value on a nonrecurring basis under the accounting standard for fair value measurements as well as our basis for classifying these assets and liabilities as Level 1, Level 2 or Level 3. We also use these valuation techniques to estimate the fair value of financial instruments not carried at fair value but disclosed as part of the fair value of financial instruments.
 
Mortgage Loans Held for Sale “HFS”—HFS loans are reported at the lower of cost or fair value in our condensed consolidated balance sheets. The valuation methodology and inputs used in estimating the fair value of HFS loans are described under “Mortgage Loans Held for Investment” and these loans are classified as Level 2 to the extent that significant inputs are observable. To the extent that significant inputs are unobservable or determined by extrapolation of observable points, the loans are classified within Level 3.
 
Acquired Property, Net and Other Assets—Acquired property, net mainly represents foreclosed property received in full satisfaction of a loan net of a valuation allowance. Acquired property is initially recorded in


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