onsibility for managing the interest rate risk associated with its investments in mortgage assets. This segment’s business activity is primarily focused on making short-term use of its balance sheet rather than on long-term investments. As a result, this segment works with lender customers to provide funds to the mortgage market through short-term financing and investing activities. Activities that the company is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment conduits (REMICs) and other structured securitizations, and MBS trading. Whole Loan Conduit: Whole loan conduit activities involve the company’s purchase of single-family loans principally for the purpose of securitizing them. The company purchases loans from a large group of lenders and then securitizes them as Fannie Mae MBS, which might then be sold to dealers and investors. Early Funding: Lenders who deliver whole loans or pools of whole loans to the company in exchange for MBS typically must wait between 30 and 45 days from the closing and settlement of the loans or pools and the issuance of the MBS. Under the company’s early lender funding programs, it purchases whole loans or pools of loans on an accelerated basis, allowing lenders to receive quicker payment for the whole loans and pools, which replenishes their funds and allows them to originate more mortgage loans. REMICs and Other Structured Securitizations: The company issues structured Fannie Mae MBS (including REMICs), typically for its lender customers or securities dealer customers, in exchange for a transaction fee. MBS Trading: The company regularly enters into purchase and sale transactions with other market participants involving mortgage-backed securities (MBS) issued by Fannie Mae, Freddie Mac, and Ginnie Mae, which the company refers to as ‘agency MBS’. These transactions could provide for the future delivery of MBS with underlying single-family loans that share certain general characteristics (referred to as the ‘TBA market’). These purchase and sale transactions also could provide for the future delivery of primarily identified MBS with underlying loans that have other characteristics considered desirable by some investors (referred to as the ‘Specified Pools market’). Through the company’s trading activity in the TBA and Specified Pools markets, it provides liquidity to the agency MBS markets. Securitization Activities This segment engages in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third-party assets. Portfolio Securitizations: This segment creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in the company’s retained mortgage portfolio. This segment might sell these Fannie Mae MBS into the secondary market or might retain the Fannie Mae MBS in the company’s retained mortgage portfolio. Structured Securitizations: This segment creates single-class and multi-class structured Fannie Mae MBS, typically for the company’s lender customers or securities dealer customers, in exchange for a transaction fee. In these transactions, the customer ‘swaps’ a mortgage-related asset that it owns (typically a mortgage security) in exchange for a structured Fannie Mae MBS that the company issues. The process for issuing Fannie Mae MBS in a structured securitization is similar to the process involved in the company’s lender swap securitizations. Other Customer Services This segment provides the company’s lender customers with services that include offering to purchase mortgage assets; segregating customer portfolios to obtain optimal pricing for their mortgage loans; and assisting customers with hedging their mortgage business. These activities help to create a market for the company’s customers and improve liquidity in the secondary mortgage market. Liquidity Support and Financing Activities This segment funds its purchases primarily through the issuance of various debt securities in a range of maturities in the domestic and international capital markets. The ac
fannie mae (FNMA:OTC US)
3900 Wisconsin Avenue, NW
Washington, DC 20016
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