Fannie Mae (FNMFN)

Description:

Fannie Mae is a government-sponsored enterprise that was chartered by Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The Company has three business segments for management reporting purposes namely Single-Family Credit Guaranty, Multifamily, and Capital Markets. Single-Family business provides funds to the mortgage market by acquiring single-family loans through lender swap transactions or, working also with its Capital Markets group, through loan purchases. Its Single-Family business has primary responsibility for pricing and managing the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Multifamily business provides mortgage market liquidity for properties with five or more residential units, which may be apartment communities, cooperative properties, seniors housing, dedicated student housing or manufactured housing communities. Its multifamily business works with its lender customers to provide funds to the mortgage market primarily by securitizing multifamily mortgage loans into Fannie Mae MBS. The Company also purchase multifamily mortgage loans and provide credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. In addition, it has offered debt financing structures that can be used to facilitate construction loans. Its multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae's portfolio, as well as to facilitate portfolio securitization and resecuritization activities. Capital Markets group manages its mortgage-related assets and other interest-earning non-mortgage investments. It funds its purchases primarily through proceeds it receives from the issuance of debt securities in the domestic and international capital markets. Capital Markets group's business activity is primarily focused on making short-term use of balance sheet rather than on long-term investments. Its competitors include Freddie Mac, FHA, Ginnie Mae, the twelve FHLBs, financial institutions, securities dealers, insurance companies, pension funds, investment funds and other investors.