Fourth-Quarter and Full-Year 2011 Results 1 

 Resource Center: 1-800-732-6643 

Contact: Pete Bakel 

202-752-2034 

Date: February 29, 2012 

Fannie Mae Reports Fourth-Quarter and Full-Year 2011 Results 

Fannie Mae Maintains a Clear Focus on Building Profitable, High-Quality New Book of Business and 

Providing Liquidity for the Mortgage Market 

Company Enables Millions of Americans to Benefit from Financing Solutions that Promote 

Homeownership and Quality Rental Housing 

WASHINGTON, DC – Fannie Mae (FNMA/OTC) today reported a net loss of $2.4 billion in the fourth 

quarter of 2011, compared with a net loss of $5.1 billion in the third quarter of the year. The company’s 

net loss in the fourth quarter reflected $5.5 billion in credit-related expenses, the substantial majority of 

which were related to its legacy (pre-2009) book of business and due largely to a decline in home prices. 

These charges were partially offset by a growing percentage of net revenues from the company’s highquality new book of business. 

For the full year of 2011, Fannie Mae reported a net loss of $16.9 billion, compared with a loss of $14.0 

billion for 2010. The increase in the net loss for the year was due primarily to a $6.1 billion increase in 

net fair value losses in 2011. This resulted from losses in the company’s risk management derivatives in 

2011 caused by a significant decline in interest rates during the year. These fair value losses on the 

company’s derivatives were offset by fair value gains during 2011 related to its mortgage investments; 

however, only a portion of these investments is recorded at fair value in its financial statements. 

“While economic factors such as falling home prices and high unemployment produced strong 

headwinds for our business again in 2011, we continued to grow a very strong new book of business as 

we have since 2009. During the year, Fannie Mae funded the market with more than $650 billion in 

liquidity and maintained its focus on strengthening Fannie Mae’s ability to support and improve the 

housing industry,” said Michael J. Williams, president and chief executive officer. “For example, since 

2009, we have set industry standards for underwriting that promote sustainable homeownership and 

affordable rental housing. Families across America also have benefited from efforts by Fannie Mae to 

enable homeowners to refinance 6.6 million mortgages, 1.9 million households to purchase a home, and 

provided financing for over 1.1 million units of quality rental housing.” 

“We continue to build a high-quality new book of business for both single-family and multifamily. Our 

new single-family book now accounts for more than half of our overall single-family guaranty book of 

business,” said Susan McFarland, executive vice president and chief financial officer. “Fannie Mae 

remains focused on reducing losses on the legacy book and we estimate that we have reserved for the 

substantial majority of the remaining losses on these loans. We are seeing positive outcomes from our 

actions, such as our investments to build the industry’s most effective credit operation, which completed 

more than one million workout solutions since 2009 to help homeowners retain their homes or avoid 

foreclosure.” 
Fourth-Quarter and Full-Year 2011 Results 2 

The company’s net worth deficit of $4.6 billion as of December 31, 2011, reflects the recognition of its 

total comprehensive loss of $1.9 billion and its payment to Treasury of $2.6 billion in senior preferred 

stock dividends during the fourth quarter of 2011. The Acting Director of the Federal Housing Finance 

Agency (“FHFA”) will submit a request to Treasury on Fannie Mae’s behalf for $4.571 billion to 

eliminate the company’s net worth deficit. Upon receipt of those funds, the company’s total obligation 

to Treasury for its senior preferred stock, which will require an annualized dividend payment of 

$11.7 billion, will be $117.1 billion. The table below shows the amount of Fannie Mae’s requested 

draws from Treasury and dividend payments to Treasury since entering into conservatorship on 

September 6, 2008. 

Treasury Draw Requests and Dividend Payments 

$ in Billions 

Cumulative 

Total 

Treasury Draw Requests(1) $116.1 

Dividend Payments $19.8 

Cumulative percentage of 

dividends to Treasury Draw 17.1% 

$15.2

$19.0

$10.7

$15.0 $15.3

$8.4

$1.5

$2.5 $2.6

$8.5

$5.1

$7.8

$4.6

$0.0 $0.0 $0.4 $0.9 $1.2 $1.5 $1.9 $2.1 $2.2 $2.2 $2.3 $2.5 $2.6

Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

Draw Request from Treasury Dividend Payment to Treasury

(2) (2)

(3) (4)

(1) Treasury draw requests do not include the initial $1.0 billion liquidation preference of Fannie Mae's senior preferred stock, 

for which Fannie Mae did not receive any cash proceeds. 

(2) Fannie Mae paid dividends to Treasury of $31 million in the fourth quarter of 2008 and $25 million in the first quarter of 

2009. 

(3) Represents the draw required and requested based on Fannie Mae's net worth deficit for the quarters presented. Draw 

requests were funded in the quarter following each quarterly net worth deficit. 

(4) Represents quarterly cash dividends paid during the quarters presented by Fannie Mae to Treasury, based on an annual rate 

of 10% per year on the aggregate liquidation preference of the senior preferred stock. 
Fourth-Quarter and Full-Year 2011 Results 3 

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Fannie Mae has continued to provide liquidity and support to the U.S. mortgage market in a number of 

important ways: 

The company has served as a stable source of liquidity for purchases of homes and financing of 

multifamily rental housing, as well as for refinancing existing mortgages. Fannie Mae provided 

approximately $2.3 trillion in liquidity to the mortgage market from 2009 through 2011 by its purchases 

and guarantees of mortgage loans, including more than 8.5 million single-family mortgage loans, which 

enabled borrowers to purchase homes or refinance mortgages, and multifamily loans that financed over 

1.1 million units of multifamily housing. 

 Fannie Mae has been a consistent market presence as it continued to provide liquidity to the 

mortgage market even when other sources of capital exited the market, as has been shown repeatedly 

over the last few years. The company estimates Fannie Mae, Freddie Mac, and Ginnie Mae have 

collectively guaranteed more than 99 percent of new single-family mortgage-related securities 

issuances in 2009 through 2011, which accounted for more than 85 percent of single-family first-lien 

mortgages the company currently estimates were originated in the United States from 2009 through 

2011. Because the company’s estimate of mortgage originations is subject to change as additional 

data become available, the company’s estimated share of single-family first-lien mortgages for prior 

periods may change in the future, perhaps materially. 

 The company has strengthened its underwriting and eligibility standards to support sustainable 

homeownership, enabling borrowers to have access to a variety of conforming mortgage products, 

including long-term, fixed-rate mortgages, such as the prepayable 30-year fixed-rate mortgage that 

protects homeowners from interest rate swings. 

 The company helped more than 900,000 homeowners retain their homes or otherwise avoid 

foreclosure from 2009 through 2011, which helped support neighborhoods, home prices, and the 

housing market. Moreover, borrowers’ ability to pay their modified loans has improved in recent 

periods as the company has enhanced the structure of its modifications. For loans modified outside 

of the Administration’s Home Affordable Modification Program (“HAMP”), one year after 

modification, 67 percent of modifications that the company made in the fourth quarter of 2010 were 

performing, compared with 50 percent of modifications in the fourth quarter of 2009. For loans 

modified under HAMP, one year after modification, 74 percent of its HAMP modifications made in 

the fourth quarter of 2010 were performing, compared with 73 percent of its HAMP modifications in 

the fourth quarter of 2009. 

 The company helped borrowers refinance loans through its Refi PlusTM initiative, which provides 

expanded refinance opportunities for eligible Fannie Mae borrowers. The company acquired 

approximately 732,000 loans refinanced under its Refi Plus initiative in 2011. Some borrowers may 

have increased their monthly payments as they took advantage of lower interest rates to reduce the 

terms of their loans, to switch from adjustable rates to fixed rates, or to switch from interest-only 

mortgages to fully amortizing mortgages. Even taking these refinancings into account, the 

company’s acquisitions under Refi Plus reduced its borrowers’ monthly mortgage payments by an 

average of $166. 

 The company continued to support affordability in the multifamily rental market. More than 85

percent of the multifamily units it financed from 2009 through 2011 were affordable to families 

earning at or below the median income in their area. 
Fourth-Quarter and Full-Year 2011 Results 4 

 The company remained the largest single issuer of mortgage-related securities in the secondary 

market in the fourth quarter of 2011, with an estimated market share of new single-family mortgagerelated securities issuances of 54 percent, compared with 43 percent in the third quarter of 2011 and 

49 percent in the fourth quarter of 2010. Fannie Mae also remained a constant source of liquidity in 

the multifamily market. As of September 30, 2011 (the latest date for which information was 

available), the company owned or guaranteed approximately 21 percent of the outstanding debt on 

multifamily properties. 

During 2011, Fannie Mae purchased or guaranteed approximately $653 billion in loans, measured by 

unpaid principal balance, which included approximately $67 billion in delinquent loans purchased from 

its single-family mortgage-backed securities (“MBS”) trusts. Fannie Mae’s purchases and guarantees 

during 2011 enabled its lender customers to finance approximately 2,680,000 single-family conventional 

loans and loans for approximately 423,000 units in multifamily properties. 

CREDIT QUALITY 

New Single-Family Book of Business: Fifty-three percent of Fannie Mae’s single-family guaranty book 

of business as of December 31, 2011 consisted of loans it had purchased or guaranteed since the 

beginning of 2009. The company’s new single-family book of business has a strong overall credit 

profile and is performing well. The company expects that these loans will be profitable over their 

lifetime, meaning the company’s fee income on these loans will exceed the company’s credit losses and 

administrative costs for them. If future macroeconomic conditions turn out to be more adverse than the 

company’s expectations, these loans could become unprofitable. 

Single-family conventional loans added to Fannie Mae’s book of business since January 1, 2009, have a 

weighted average loan-to-value ratio at origination of 68 percent, and a weighted average credit score at 

origination of 762. 

For more information on the expected lifetime profitability of the company’s new single-family book of 

business, please refer to the discussion following Table 3 in the company’s annual report on Form 10-K 

for the year ended December 31, 2011. 

2005 to 2008 Single-Family Book of Business: The single-family credit losses the company realized 

from 2009 through 2011, combined with the amounts the company had reserved for single-family credit 

losses as of December 31, 2011, total approximately $140 billion. The substantial majority of these 

losses were attributable to single-family loans the company purchased or guaranteed from 2005 through 

2008. The company expects its loss reserves will remain significantly elevated relative to historical 

levels for an extended period because: (1) it expects future defaults on loans in its legacy book of 

business and the resulting charge-offs will occur over a period of years; and (2) a significant portion of 

its reserves represents concessions granted to borrowers upon modification of their loans and will 

remain in its reserves until the loans are fully repaid or default. 

The 2005 to 2008 acquisitions are becoming a smaller percentage of the company’s single-family 

guaranty book of business, having decreased from 39 percent of its single-family guaranty book of 

business as of December 31, 2010, to 31 percent as of December 31, 2011. 
Fourth-Quarter and Full-Year 2011 Results 5 

Fannie Mae’s single-family serious delinquency rate has decreased each quarter since the first quarter of 

2010. This decrease is the result of home retention solutions, as well as foreclosure alternatives and 

completed foreclosures. The decrease also is attributable to the company’s acquisition of loans with a 

stronger credit profile since the beginning of 2009, as these loans are now more than 50 percent of the 

single-family guaranty book of business, resulting in a smaller percentage of the company’s loans 

becoming seriously delinquent. The company expects serious delinquency rates will continue to be 

affected in the future by home price changes, changes in other macroeconomic conditions, the length of 

the foreclosure process, the volume of loan modifications, and the extent to which borrowers with 

modified loans continue to make timely payments. In addition, due to circumstances in the foreclosure 

environment, foreclosures are proceeding at a slow pace, which has resulted in loans remaining seriously 

delinquent in the company’s book of business for a longer time. 

STRATEGIES TO REDUCE CREDIT LOSSES ON THE LEGACY BOOK 

To reduce the credit losses Fannie Mae ultimately incurs on its legacy book of business, the company 

has been focusing its efforts on several strategies, including reducing defaults by offering home 

retention solutions, such as loan modifications. Successful modifications allow borrowers who were 

having problems making their pre-modification mortgage payments to remain in their homes. While 

loan modifications contribute to higher credit-related expenses in the near term, the company believes 

that successful modifications will ultimately reduce the company’s credit losses over the long term from 

what they otherwise would have been if the company had foreclosed on the loans. Fannie Mae 

completed approximately 213,000 loan modifications during 2011, bringing the total number of loan 

modifications the company has completed since January 2009 to more than 715,000. The substantial 

majority of these modifications involved deferring or lowering borrowers’ monthly mortgage payments, 

which the company believes increases the likelihood borrowers will be able to remain current on their 

modified loans. Borrowers’ ability to pay their modified loans has improved in recent periods as the 

company has enhanced the structure of its modifications. The ultimate long-term success of the 

company’s current modification efforts is uncertain and will be highly dependent on economic factors, 

such as unemployment rates, household wealth and income, and home prices, as well as borrowers’ 

willingness to pay their loans. 

As the company works to reduce credit losses, it also seeks to assist struggling borrowers, help stabilize 

communities, and support the housing market. In dealing with struggling borrowers, Fannie Mae first 

seeks home retention solutions that enable them to keep their homes before turning to foreclosure 

alternatives. If the company is unable to provide a viable home retention solution for a struggling 

borrower, the company seeks to offer a foreclosure alternative and complete it in a timely manner. From 

2009 through 2011, the company completed approximately 195,000 preforeclosure sales (also known as 

short sales) and deeds-in-lieu of foreclosure. When there is no viable home retention solution or 

foreclosure alternative that can be applied, the company seeks to move to foreclosure expeditiously. 

The goal of these efforts is to help minimize delinquencies that can adversely impact local home values 

and destabilize communities, as well as lower costs to Fannie Mae. 
Fourth-Quarter and Full-Year 2011 Results 6 

Improving servicing standards and execution is another key aspect of the company’s strategy to reduce 

its credit losses. The performance of the company’s mortgage servicers is critical to its success in 

reducing defaults, completing foreclosure alternatives, and managing workout and foreclosure timelines 

efficiently, because servicers are the primary point of contact with borrowers. Fannie Mae is taking a 

number of steps to improve the servicing of its delinquent loans. 

 In June 2011, the company issued new standards for mortgage servicers under FHFA’s Servicing 

Alignment Initiative (“Initiative”). The Initiative is aimed at establishing consistency in the 

servicing of delinquent loans owned or guaranteed by Fannie Mae and Freddie Mac. Among other 

things, the new servicing standards, which became effective October 1, 2011, are designed to result 

in earlier, more frequent, and more effective contact with borrowers, and to improve servicer 

performance by providing servicers monetary incentives for exceeding loan workout benchmarks 

and by imposing fees on servicers for failing to meet loan workout benchmarks or foreclosure 

timelines. 

 In some cases, Fannie Mae transfers servicing on loan populations that include loans with higherrisk characteristics to special servicers with whom the company has worked to develop hightouch protocols for servicing these loans. These protocols include lowering the ratio of loans per 

servicer employee, prescribing borrower outreach strategies to be used at early stages of 

delinquency, and providing struggling borrowers a single point of contact to resolve issues. 

Transferring servicing on higher-risk loans enables the borrowers (and loans) to benefit from these 

high-touch protocols while increasing the original servicer’s capacity to service the remaining loans, 

creating an opportunity to improve service to the remaining borrowers. 

 In September 2011, Fannie Mae issued its first ratings of servicers’ performance under its Servicer 

Total Achievement and Rewards (“STAR”) program. The STAR program is designed to encourage 

improvements in customer service and foreclosure prevention outcomes for homeowners by rating 

servicers on their performance in these areas. 

While Fannie Mae believes these steps will improve the servicing on its loans, ultimately the company is 

dependent on servicers’ willingness, efficiency, and ability to implement its home retention solutions 

and foreclosure alternatives, and to manage timelines for workouts and foreclosures. For more 

information on the company’s strategies to reduce credit losses on its legacy book, please refer to the 

company’s annual report on Form 10-K for the year ended December 31, 2011. 

The company believes that home retention solutions are most effective in preventing defaults when 

completed at an early stage of delinquency. Similarly, the company’s foreclosure alternatives are more 

likely to be successful in reducing its loss severity if they are executed expeditiously. Accordingly, 

providing potential home retention solutions to delinquent borrowers early in the delinquency and, 

where no home retention solutions or foreclosure alternatives are available, reducing delays in 

completing foreclosure is a fundamental component of the company’s strategy to reduce its credit losses 

and help stabilize the housing market. 
Fourth-Quarter and Full-Year 2011 Results 7 

HOME RETENTION SOLUTIONS AND FORECLOSURE ALTERNATIVES 

Loan Workouts: During the fourth quarter of 2011, Fannie Mae completed more than 82,000 singlefamily loan workouts, including more than 60,000 home-retention solutions (modifications, repayment 

plans, and forbearances). For the year, the company completed 328,491 single-family loan workouts. 

Details of the company’s home-retention solutions and foreclosure alternatives include: 

 Loan modifications, which consist of permanent modifications under HAMP and Fannie Mae’s 

own modification options, decreased in the fourth quarter of 2011 to 51,936 from 60,025 in the third 

quarter of 2011. For the year, the company completed 213,340 loan modifications, compared with 

403,506 in 2010. The volume of workouts completed in 2011 decreased compared with 2010, 

primarily driven by a decline in the number of seriously delinquent loans in 2011, compared with 

2010. In addition, the company began to require that all Fannie Mae non-HAMP modifications also 

must go through a trial period, which initially lowers the number of modifications that can become 

permanent in any particular period. 

 Repayment plans/forbearances of 8,517 in the fourth quarter of 2011, compared with 8,202 in the 

third quarter of 2011. For the year, the company completed 35,318 repayment plans/forbearances, 

compared with 31,579 in 2010. 

 Short sales and deeds-in-lieu of foreclosure of 22,231 in the fourth quarter of 2011, compared with 

19,306 in the third quarter of 2011. For the year, the company completed 79,833 short sales and 

deeds-in-lieu of foreclosure, compared with 75,391 in 2010. 

Homeowner Initiatives: During 2011, Fannie Mae continued to develop programs and invest in 

initiatives designed to help keep people in homes, assist prospective homeowners, and support the 

mortgage and housing markets overall. As of December 31, 2011, Fannie Mae had established twelve 

Mortgage Help Centers across the nation to accelerate the response time for struggling borrowers with 

loans owned by Fannie Mae. During 2011, these centers helped borrowers obtain nearly 6,100 home 

retention plans. The company’s Mortgage Help Centers are complemented in their efforts by 

partnerships with 17 local non-profit organizations in 16 cities, collectively known as its Mortgage Help 

Network. The Mortgage Help Network represents a contractual relationship with select not-for-profit 

counseling agencies located in the company’s top delinquent mortgage markets to provide borrowers 

with loans owned by Fannie Mae foreclosure prevention counseling, documentation assistance, and 

assistance with pending loan workout solutions. The company also uses direct mail, phone calls, and 

some advertising to encourage homeowners to visit KnowYourOptions.com to pursue home retention 

solutions and foreclosure alternatives. 

Refinancing Initiatives: Through the company’s Refi PlusTM initiative, which provides expanded 

refinance opportunities for eligible Fannie Mae borrowers, and includes The Administration’s Home 

Affordable Refinance Program (“HARP”) loans, the company acquired approximately 732,000 loans 

during 2011. Some borrowers may have increased their monthly payments as they took advantage of 

lower interest rates to reduce the terms of their loans, to switch from adjustable rates to fixed rates, or to 

switch from interest-only mortgages to fully amortizing mortgages. Even taking these refinancings into 

account, the company’s acquisitions under Refi Plus reduced its borrowers’ monthly mortgage payments 

by an average of $166. 
Fourth-Quarter and Full-Year 2011 Results 8 

FORECLOSURES AND REO 

Fannie Mae acquired 47,256 single-family real-estate owned (“REO”) properties, primarily through 

foreclosure, in the fourth quarter of 2011, compared with 45,194 in the third quarter of 2011. 

Fannie Mae disposed of 51,344 single-family REO in the fourth quarter of 2011, compared with 58,297 

in the third quarter of 2011. As of December 31, 2011, the company’s inventory of single-family REO 

properties was 118,528, compared with 122,616 as of September 30, 2011, and 162,489 as of 

December 31, 2010. The carrying value of the company’s single-family REO was $9.7 billion as of 

December 31, 2011, compared with $11.0 billion as of September 30, 2011, and $15.0 billion as of 

December 31, 2010. 

The company’s single-family foreclosure rate was 1.13 percent on an annualized basis for 2011, 

compared with 1.15 percent in the first nine months of 2011 and 1.46 percent for 2010. This reflects the 

annualized number of single-family properties acquired through foreclosure as a percentage of the total 

number of loans in Fannie Mae’s single-family conventional guaranty book of business. 

The changing foreclosure environment has significantly lengthened the time it takes to foreclose on a 

mortgage loan in many states, which has slowed the pace of Fannie Mae’s REO property acquisitions. 

The increase in foreclosure timelines also has increased Fannie Mae’s credit-related expenses and 

negatively affected its single-family serious delinquency rates. Moreover, Fannie Mae believes these 

changes in the foreclosure environment will delay the recovery of the housing market because it will 

take longer to clear the housing market’s supply of distressed homes, which typically sell at a discount 

to non-distressed homes and therefore negatively affect overall home prices. 

SUMMARY OF FOURTH-QUARTER AND FULL-YEAR 2011 RESULTS

Fannie Mae reported a net loss of $2.4 billion for the fourth quarter of 2011, compared with a net loss of 

$5.1 billion in the third quarter of 2011. The company reported a net loss of $16.9 billion for 2011, 

compared with a loss of $14.0 billion for 2010. The net worth deficit of $4.6 billion as of December 31, 

2011 takes into account dividends paid on senior preferred stock held by Treasury. 
Fourth-Quarter and Full-Year 2011 Results 9 

 

(Dollars in millions)(1) 4Q11 3Q11 Variance 2011 2010 Variance

 

Net interest income $ 4,163 $ 5,186 $ (1,023) $ 19,281 $ 16,409 $ 2,872 

Fee and other income 370 291 79 1,163 1,084 79 

Net revenues 4,533 5,477 (944) 20,444 17,493 2,951 

Investment gains, net 187 73 114 506 346 160 

Net other-than-temporary impairments 54 (262) 316 (308) (722) 414 

Fair value losses, net (751) (4,525) 3,774 (6,621) (511) (6,110)

Administrative expenses (605) (591) (14) (2,370) (2,597) 227 

Credit-related expenses(2) (5,513) (4,884) (629) (27,498) (26,614) (884)

Other non-interest expenses(3) (311) (373) 62 (1,098) (1,495) 397 

Net losses and expenses (6,939) (10,562) 3,623 (37,389) (31,593) (5,796)

Loss before federal income taxes (2,406) (5,085) 2,679 (16,945) (14,100) (2,845)

(Provision) benefit for federal income taxes (1) - (1) 90 82 8 

Net loss (2,407) (5,085) 2,678 (16,855) (14,018) (2,837)

Less: Net loss attributable to the 

noncontrolling interest 1 - 1 - 4 (4)

Net loss attributable to Fannie Mae $ (2,406) $ (5,085) $ 2,679 $ (16,855) $ (14,014) $ (2,841) 

Total comprehensive loss attributable 

to Fannie Mae $ (1,945) $ (5,282) $ 3,337 $ (16,408) $ (10,570) $ (5,838) 

Preferred stock dividends $ (2,622) $ (2,494) $ (128) $ (9,614) $ (7,704) $ (1,910) 

(1) Certain prior period amounts have been reclassified to conform to the current period presentation.

(2) Consists of provision for loan losses, provision for guaranty losses and foreclosed property expense (income).

(3) Consists of debt extinguishment losses, net and other expenses. 

Net revenues were $4.5 billion in the fourth quarter of 2011, down 17 percent from $5.5 billion in the 

third quarter of 2011. Net interest income was $4.2 billion, down 20 percent from $5.2 billion in the 

third quarter of 2011. The decline in net interest income was due primarily to an out-of-period 

adjustment of $1.2 billion recorded in the fourth quarter of 2011 to correct the rate used to calculate 

interest income on mortgage-related securities. For the year, net revenues were $20.4 billion, up 17 

percent from $17.5 billion in 2010. 

Credit-related expenses, which consist of the provision for loan losses, provision for guaranty losses, 

and foreclosed property expense, were $5.5 billion in the fourth quarter of 2011, up from $4.9 billion in 

the third quarter of 2011. For the year, credit-related expenses were $27.5 billion, compared with $26.6 

billion in 2010. The increase in the company’s credit-related expenses in the fourth quarter and full year 

of 2011 was driven largely by a decline in home prices. 

Credit losses, which the company defines generally as net charge-offs plus foreclosed property expense, 

excluding the effect of certain fair-value losses, were $4.7 billion in the fourth quarter of 2011, 

compared with $4.5 billion in the third quarter of 2011. For the year, credit losses were $18.7 billion, 

compared with $23.6 billion in 2010. Credit losses were up in the fourth quarter of 2011 compared with 

the third quarter of 2011 due to a slight increase in foreclosure acquisitions. Credit losses were down 

year over year due to the slowdown in the processing of foreclosures and an increase in the amounts 

received related to outstanding repurchase requests. 
Fourth-Quarter and Full-Year 2011 Results 10 

Total loss reserves, which reflect an estimate of the probable losses the company has incurred in its 

guaranty book of business, including concessions it granted borrowers upon modification of their loans, 

increased to $76.9 billion as of December 31, 2011, compared with $75.6 billion as of September 30, 

2011. The total loss reserve coverage to total nonperforming loans was 31 percent as of December 31, 

2011, compared with 30 percent as of September 30, 2011, and 26 percent as of December 31, 2010. 

The continued stress on a broad segment of borrowers from persistent high levels of unemployment and 

underemployment, and the prolonged decline in home prices have caused the company’s total loss 

reserves to remain high for the past few years. 

Net fair value losses were $751 million in the fourth quarter of 2011, compared with net fair value 

losses of $4.5 billion in the third quarter of 2011. For the year, net fair value losses were $6.6 billion, 

compared with $511 million in 2010. The fourth quarter decrease and full-year increase was driven 

primarily by fair value losses on Fannie Mae’s risk management derivatives due to a significant decline 

in interest rates during the third quarter of 2011. 

NET WORTH AND U.S. TREASURY FUNDING

The Acting Director of FHFA will request $ 4.571 billion of funds from Treasury on the company’s 

behalf under the terms of the senior preferred stock purchase agreement between Fannie Mae and 

Treasury to eliminate the company’s net worth deficit as of December 31, 2011. Fannie Mae’s fourthquarter dividend of $2.6 billion on its senior preferred stock held by Treasury was declared by FHFA 

and paid by the company on December 31, 2011. 

In December 2011, Treasury provided the company $7.8 billion to cure its net worth deficit as of 

September 30, 2011. As a result of this draw, the aggregate liquidation preference of the senior 

preferred stock increased from $104.8 billion to $112.6 billion as of December 31, 2011. It will increase 

to $117.1 billion upon the receipt of funds from Treasury to eliminate the company’s fourth-quarter 

2011 net worth deficit, which will require an annualized dividend payment of $11.7 billion. This 

amount exceeds the company’s reported annual net income for every year since its inception. 

 

Through December 31, 2011, Fannie Mae has paid an aggregate of $19.8 billion to Treasury in 

dividends on the senior preferred stock. 

 

OUTSTANDING BANK OF AMERICA REPURCHASE REQUESTS 

Fannie Mae makes repurchase requests for lenders to repurchase loans or compensate Fannie Mae for 

losses sustained on loans that do not meet its underwriting or eligibility requirements, or for which the 

mortgage insurer has rescinded coverage. In the fourth quarter of 2011, Bank of America, the 

seller/servicer with which Fannie Mae has the most repurchase requests outstanding, slowed the pace of 

its repurchases. As a result of Bank of America's failure to honor its contractual obligations in a timely 

manner, the already high volume of Fannie Mae’s outstanding repurchase requests with Bank of 

America increased substantially. Measured by unpaid principal balance, Bank of America accounted for 

approximately 52 percent of Fannie Mae’s outstanding repurchase requests as of December 31, 2011, 

compared with 45 percent as of September 30, 2011 and 41 percent as of December 31, 2010, shortly 

after entering into an agreement with Fannie Mae to address its then outstanding repurchase requests. 

Similarly, Bank of America accounted for 59 percent of Fannie Mae’s repurchase requests that had been 

outstanding for more than 120 days as of December 31, 2011, compared with 48 percent as 

of September 30, 2011 and 37 percent as of December 31, 2010. Fannie Mae is taking steps to address 

Bank of America's delays in honoring Fannie Mae’s repurchase requests. For example, Fannie Mae did 

not renew its existing loan delivery contract with Bank of America at the end of January, which 
Fourth-Quarter and Full-Year 2011 Results 11 

significantly restricted the types of loans they can deliver to Fannie Mae. Bank of America can continue 

delivering loans to Fannie Mae under the company’s Refi Plus initiative, including HARP loans. 

Bank of America's failure to honor repurchase obligations in a timely manner has not caused Fannie 

Mae to change its estimate of the amounts it expects to collect from them ultimately, and Fannie Mae 

continues to work with Bank of America to resolve these issues. If Fannie Mae collects less than the 

amount it expects from Bank of America, Fannie Mae may be required to seek additional funds from 

Treasury under its senior preferred stock purchase agreement. Table 55 in Fannie Mae’s annual report 

on Form 10-K for the year ended December 31, 2011 displays its top five mortgage seller/servicers by 

outstanding repurchase requests based on the unpaid principal balance of the loans underlying the 

repurchase requests issued as of December 31, 2011. Fannie Mae does not expect the change in its 

agreement with Bank of America to be material to Fannie Mae’s business or results of operations, as 

Bank of America represented less than 5 percent of Fannie Mae’s loan delivery volume in the quarter 

ended December 31, 2011. 

BUSINESS SEGMENT RESULTS

Fannie Mae conducts its activities through three complementary businesses: its Single-Family business, 

its Multifamily business, and its Capital Markets group. The company’s Single-Family and Multifamily 

businesses work with Fannie Mae’s lender customers, who deliver mortgage loans that the company 

purchases and securitizes into Fannie Mae MBS. The Capital Markets group manages the company’s 

investment activity in mortgage-related assets and other interest-earning non-mortgage investments, 

funding investments in mortgage-related assets primarily with proceeds received from the issuance of 

Fannie Mae debt securities in the domestic and international capital markets. The Capital Markets group 

also provides liquidity to the mortgage market through short-term financing and other activities. 

Single-Family guaranty book of business was $2.84 trillion as of both December 31, 2011 and 

September 30, 2011. Similarly, Single-Family guaranty fee income for both the third and fourth quarter 

2011 was $1.9 billion. The Single-Family business lost $4.5 billion in the fourth quarter of 2011, 

compared with $3.7 billion in the third quarter of 2011, due primarily to credit-related expenses of $5.4 

billion, the substantial majority of which were attributable to loans purchased or guaranteed prior to 

2009. For the year, the Single-Family business lost $23.9 billion, compared with a loss of $26.7 billion 

in 2010. 

Multifamily guaranty book of business was $195.2 billion as of December 31, 2011, compared with 

$193.3 billion as of September 30, 2011. Multifamily recorded credit-related expenses of $116 million 

in the fourth quarter of 2011, compared with credit-related expenses of $102 million in the third quarter 

of 2011. Multifamily earned $177 million in the fourth quarter of 2011, compared with $72 million in 

the third quarter of 2011. For the year, Multifamily earned $583 million, compared with earnings of 

$216 million in 2010. 

Capital Markets’ net interest income for the fourth quarter of 2011 was $2.4 billion. Fair value losses 

were $637 million, compared with fair value losses of $4.7 billion in the third quarter of 2011. The 

Capital Markets mortgage investment portfolio balance decreased to $708.4 billion as of December 31, 

2011, compared with $722.2 billion as of September 30, 2011, resulting from purchases of $55.9 billion, 

liquidations of $36.2 billion, and sales of $33.4 billion during the quarter. The Capital Markets group 

earned $2.6 billion in the fourth quarter of 2011, compared with $711 million lost in the third quarter of 

2011. Capital Markets’ third-quarter losses were driven by losses on the company’s risk management 

derivatives in the third quarter of 2011. For the year, Capital Markets earned $9.0 billion, compared 

with $16.1 billion in 2010. 
Fourth-Quarter and Full-Year 2011 Results 12 

The company provides further discussion of its financial results and condition, credit performance, fair 

value balance sheets, and other matters in its annual report on Form 10-K for the year ended December 

31, 2011, which was filed today with the Securities and Exchange Commission. Further information 

about the company’s credit performance, the characteristics of its guaranty book of business, the drivers 

of its credit losses, its foreclosure-prevention efforts, and other measures is contained in the “2011 

Credit Supplement” on Fannie Mae’s Web site, www.fanniemae.com. 

# # # 

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements regarding the company’s 

future financial results; the profitability of its loans; the impact of successful loan modifications; FHFA’s future requests to Treasury on Fannie Mae’s 

behalf; Fannie Mae’s future serious delinquency rates, credit losses, credit-related expenses, defaults, and charge-offs; its draws from and dividends to be 

paid to Treasury; the performance, profitability and caliber of loans it is acquiring; the impact of the changing foreclosure environment; the impact of the 

company’s actions on its delinquencies, defaults, loss severities, costs and credit losses; the future performance of modifications and factors that could 

influence that performance; the impact of the company’s actions on the housing industry; the impact of the company’s actions to improve the servicing on its 

loans; the company’s expectations regarding its future loss reserves; the company’s expectations regarding the impact of the change in its agreement with 

Bank of America; the company’s expectations regarding amounts it will ultimately collect from Bank of America; and the potential impact on the company’s 

Treasury draws of the company’s future collections from Bank of America. These estimates, forecasts, expectations, and statements are forward-looking 

statements and are based on the company’s current assumptions regarding numerous factors, including assumptions about future home prices and the future 

performance of its loans. The company’s future estimates of these amounts, as well as the actual amounts, may differ materially from its current estimates as 

a result of home price changes, interest rate changes, unemployment, other macroeconomic variables, government policy matters, changes in generally 

accepted accounting principles, credit availability, social behaviors, the volume of loans it modifies, the effectiveness of its loss mitigation strategies, 

management of its real estate owned inventory and pursuit of contractual remedies, changes in the fair value of its assets and liabilities, impairments of its 

assets, the adequacy of its loss reserves, its ability to maintain a positive net worth, effects from activities the company takes to support the mortgage market 

and help homeowners, the conservatorship and its effect on the company’s business, the investment by Treasury and its effect on the company’s business, 

changes in the structure and regulation of the financial services industry, the company’s ability to access the debt markets, disruptions in the housing, credit, 

and stock markets, government investigations and litigation, the performance of the company’s servicers, conditions in the foreclosure environment, and 

many other factors. Changes in the company’s underlying assumptions and actual outcomes, which could be affected by the economic environment, 

government policy, and many other factors, including those discussed in the “Risk Factors” section of and elsewhere in the company’s annual report on 

Form 10-K for the year ended December 31, 2011, and elsewhere in this release, could result in actual results being materially different from what is set 

forth in the forward-looking statements. 

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these Web sites is 

not part of this release. 

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a 

federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by purchasing or guaranteeing 

mortgage loans originated by mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America. 
Fourth-Quarter and Full-Year 2011 Results 13 

ANNEX I 

FANNIE MAE

(In conservatorship) 

Consolidated Balance Sheets 

(Dollars in millions, except share amounts) 

 

 As of December 31,

 2011 2010 

ASSETS

Cash and cash equivalents (includes $2 and $348, respectively, related to consolidated trusts) $ 17,539 $ 17,297 

Restricted cash (includes $45,900 and $59,619, respectively, related to consolidated trusts) 50,797 63,678 

Federal funds sold and securities purchased under agreements to resell or similar arrangements 46,000 11,751 

Investments in securities: 

 Trading, at fair value (includes $8 and $21, respectively, related to consolidated trusts) 74,198 56,856 

 Available-for-sale, at fair value (includes $1,191 and $1,055, respectively, related to consolidated trusts) 77,582 94,392 

 Total investments in securities 151,780 151,248 

Mortgage loans: 

 Loans held for sale, at lower of cost or fair value (includes $66 and $661, respectively, related 

 to consolidated trusts) 311 915 

 Loans held for investment, at amortized cost: 

 Of Fannie Mae 380,134 407,228 

 Of consolidated trusts (includes $3,611 and $2,962, respectively, at fair value and loans pledged as collateral 

 that may be sold or repledged of $798 and $2,522, respectively) 2,590,332 2,577,133 

 Total loans held for investment 2,970,466 2,984,361 

 Allowance for loan losses (72,156) (61,556)

 Total loans held for investment, net of allowance 2,898,310 2,922,805 

 Total mortgage loans 2,898,621 2,923,720 

Accrued interest receivable, net (includes $8,466 and $8,910, respectively, related to consolidated trusts) 10,000 11,279 

Acquired property, net 11,373 16,173 

Other assets (includes cash pledged as collateral of $1,109 and $884, respectively) 25,374 26,826 

 Total assets $ 3,211,484 $ 3,221,972 

LIABILITIES AND DEFICIT

Liabilities:

 Accrued interest payable (includes $9,302 and $9,712, respectively, related to consolidated trusts) $ 12,648 $ 13,764 

 Federal funds purchased and securities sold under agreements to repurchase - 52 

 Debt: 

 Of Fannie Mae (includes $838 and $893, respectively, at fair value) 732,444 780,044 

 Of consolidated trusts (includes $3,939 and $2,271, respectively, at fair value) 2,457,428 2,416,956 

 Other liabilities (includes $629 and $893, respectively, related to consolidated trusts) 13,535 13,673 

 Total liabilities 3,216,055 3,224,489 

Commitments and contingencies (Note 19) - - 

Fannie Mae stockholders' equity (deficit): 

 Senior preferred stock, 1,000,000 shares issued and outstanding 112,578 88,600 

 Preferred stock, 700,000,000 shares are authorized—555,374,922 and 576,868,139 shares issued 

 and outstanding, respectively 19,130 20,204 

 Common stock, no par value, no maximum authorization—1,308,762,703 and 1,270,092,708 shares 

 issued, respectively; 1,157,767,400 and 1,118,504,194 shares outstanding, respectively 687 667 

 Accumulated deficit (128,381) (102,986)

 Accumulated other comprehensive loss (1,235) (1,682)

 Treasury stock, at cost, 150,995,303 and 151,588,514 shares, respectively (7,403) (7,402)

 Total Fannie Mae stockholders’ deficit (4,624) (2,599)

Noncontrolling interest 53 82 

 Total deficit (4,571) (2,517)

Total liabilities and deficit $ 3,211,484 $ 3,221,972 

See Notes to Consolidated Financial Statements 
Fourth-Quarter and Full-Year 2011 Results 14 

FANNIE MAE

(In conservatorship)

Consolidated Statements of Operations and Comprehensive Loss 

(Dollars and shares in millions, except per share amounts) 

 For the Year Ended

 December 31,

 2011 2010 2009 

Interest income: 

 Trading securities $ 1,087 $ 1,251 $ 3,859 

 Available-for-sale securities 3,277 5,290 13,618 

 Mortgage loans (includes $123,633, $132,591, and $6,143, 

 respectively, related to consolidated trusts) 138,462 147,583 21,521 

 Other 117 146 357 

 Total interest income 142,943 154,270 39,355 

Interest expense: 

 Short-term debt (includes $9, $12, and $- , 

 respectively, related to consolidated trusts) 310 631 2,306 

 Long-term debt (includes $108,641, $118,373, and $344, 

 respectively, related to consolidated trusts) 123,352 137,230 22,539 

 Total interest expense 123,662 137,861 24,845 

Net interest income 19,281 16,409 14,510 

Provision for loan losses (25,914) (24,702) (9,569)

Net interest (loss) income after provision for loan losses (6,633) (8,293) 4,941 

Investment gains, net 506 346 1,458 

Other-than-temporary impairments (614) (694) (9,057)

Noncredit portion of other-than-temporary impairments recognized in other 

 comprehensive income 306 (28) (804)

Net other-than-temporary impairments (308) (722) (9,861)

Fair value losses, net (6,621) (511) (2,811)

Debt extinguishment losses, net (232) (568) (325)

Fee and other income 1,163 1,084 7,984 

 Non-interest loss (5,492) (371) (3,555)

Administrative expenses: 

 Salaries and employee benefits 1,236 1,277 1,133 

 Professional services 736 942 684 

 Occupancy expenses 179 170 205 

 Other administrative expenses 219 208 185 

 Total administrative expenses 2,370 2,597 2,207 

Provision for guaranty losses 804 194 63,057 

Foreclosed property expense 780 1,718 910 

Other expenses 866 927 8,219 

 Total expenses 4,820 5,436 74,393 

Loss before federal income taxes (16,945) (14,100) (73,007)

Benefit for federal income taxes (90) (82) (985)

Net loss (16,855) (14,018) (72,022)

Other comprehensive income: 

 Changes in unrealized losses on available-for-sale securities, net of 

 reclassification adjustments and taxes 622 3,504 11,136 

 Other (175) (60) 361 

 Total other comprehensive income 447 3,444 11,497 

Total comprehensive loss (16,408) (10,574) (60,525)

 Less: Comprehensive loss attributable to the noncontrolling interest - 4 53 

Total comprehensive loss attributable to Fannie Mae $ (16,408) $ (10,570) $ (60,472)

Net loss $ (16,855) $ (14,018) $ (72,022)

 Less: Net loss attributable to the noncontrolling interest - 4 53 

Net loss attributable to Fannie Mae (16,855) (14,014) (71,969)

Preferred stock dividends (9,614) (7,704) (2,474)

Net loss attributable to common stockholders $ (26,469) $ (21,718) $ (74,443)

Loss per share - Basic and Diluted $ (4.61) $ (3.81) $ (13.11)

Weighted-average common shares outstanding - Basic and Diluted 5,737 5,694 5,680 

See Notes to Consolidated Financial Statements 
Fourth-Quarter and Full-Year 2011 Results 15 

FANNIE MAE

(In conservatorship)

Consolidated Statements of Cash Flows 

(Dollars in millions)

 For the Year Ended December 31, 

 2011 2010 2009 

Cash flows used in operating activities: 

Net loss $ (16,855) $ (14,018) $ (72,022)

Reconciliation of net loss to net cash used in operating activities: 

 Amortization of cost basis adjustments (369) 126 2,568 

 Provisions for loan and guaranty losses 26,718 24,896 72,626 

 Valuation (gains) losses (408) (1,289) 3,425 

 (Gains) losses from partnership investments (82) 74 6,735 

 Current and deferred federal income taxes 1,044 258 (1,919)

 Purchases of loans held for sale (737) (81) (109,684)

 Proceeds from repayments of loans held for sale 68 88 2,413 

 Net change in trading securities, excluding non-cash transfers (17,048) (23,612) 11,976 

 Payments to servicers for foreclosed property expense and servicer incentive fees (5,394) (5,658) (2,570)

 Other, net (2,175) (8,179) 543 

Net cash used in operating activities (15,238) (27,395) (85,909)

Cash flows provided by investing activities:

 Purchases of trading securities held for investment (2,951) (8,547) (48,659)

 Proceeds from maturities of trading securities held for investment 2,591 2,638 12,918 

 Proceeds from sales of trading securities held for investment 1,526 21,556 39,261 

 Purchases of available-for-sale securities (192) (413) (165,103)

 Proceeds from maturities of available-for-sale securities 13,552 17,102 48,096 

 Proceeds from sales of available-for-sale securities 3,192 7,867 306,598 

 Purchases of loans held for investment (78,099) (86,724) (52,148)

 Proceeds from repayments of loans held for investment of Fannie Mae 25,190 20,715 30,958 

 Proceeds from repayments of loans held for investment of consolidated trusts 544,145 574,740 26,184 

 Net change in restricted cash 12,881 (15,025) - 

 Advances to lenders (70,914) (74,130) (79,163)

 Proceeds from disposition of acquired property and short sales 47,248 39,682 22,667 

 Contributions to partnership investments (178) (351) (688)

 Proceeds from partnership investments 283 129 87 

 Net change in federal funds sold and securities purchased under agreements to resell 

 or similar agreements (34,249) 41,471 4,230 

 Other, net 363 (531) (27,503)

Net cash provided by investing activities 464,388 540,179 117,735 

Cash flows used in financing activities:

Proceeds from the issuance of debt of Fannie Mae 766,598 1,155,993 1,930,907 

Payments to redeem debt of Fannie Mae (815,838) (1,146,363) (2,030,705)

Proceeds from issuance of debt of consolidated trusts 233,516 276,575 58 

Payments to redeem debt of consolidated trusts (647,695) (808,502) (601)

Payments of cash dividends on senior preferred stock to Treasury (9,613) (7,706) (2,470)

 Proceeds from senior preferred stock purchase agreement with Treasury 23,978 27,700 59,900 

 Net change in federal funds purchased and securities sold under agreements to repurchase - 49 (54)

 Other, net 146 (45) 18 

Net cash used in financing activities (448,908) (502,299) (42,947)

Net increase (decrease) in cash and cash equivalents 242 10,485 (11,121)

Cash and cash equivalents at beginning of period 17,297 6,812 17,933 

Cash and cash equivalents at end of period $ 17,539 $ 17,297 $ 6,812 

Cash paid during the period for:

Interest $ 128,806 $ 140,651 $ 26,344 

Income taxes - - 876 

Non-cash activities (excluding impact of the transition to the consolidation accounting guidance): 

Net mortgage loans acquired by assuming debt $ 448,437 $ 484,699 $ - 

Net transfers from (to) mortgage loans held for investment of Fannie Mae to (from) mortgage 

 loans held for investment of consolidated trusts 33,859 (121,852) - 

Transfers from advances to lenders to investments in securities - - 77,191 

Transfers from advances to lenders to loans held for investment of consolidated trusts 69,223 68,385 - 

Net transfers from mortgage loans to acquired property 56,517 66,081 5,707 

See Notes to Consolidated Financial Statements 
Fourth-Quarter and Full-Year 2011 Results 16 

FANNIE MAE

(In conservatorship) Consolidated Statements of Changes in Equity (Deficit)

(Dollars and shares in millions, except per share amounts)

 Fannie Mae Stockholders’ Equity (Deficit)

 Retained Accumulated

 Shares Outstanding Additional Earnings Other Non Total 

 Senior Senior Preferred Common Paid-In (Accumulated Comprehensive Treasury Controlling Equity 

 Preferred Preferred Common Preferred Stock Stock Capital Deficit) Loss Stock Interest (Deficit) 

Balance as of December 31, 2008 1 597 1,085 $ 1,000 $ 21,222 $ 650 $ 3,621 $ (26,790) $ (7,673) $ (7,344) $ 157 $ (15,157)

Cumulative effect from the adoption of 

 the accounting guidance on other-than- 

 temporary impairments, net of tax - - - - - - - 8,520 (5,556) - - 2,964 

Change in investment in noncontrolling 

 interest - - - - - - - - - - (13) (13)

Comprehensive loss:

Net loss - - - - - - - (71,969) - - (53) (72,022)

Other comprehensive income, net of tax effect:

Changes in net unrealized losses on 

 available-for-sale securities (net of tax

 of $2,658) - - - - - - - - 4,936 - - 4,936 

 Reclassification adjustment for other-than-

 temporary impairments recognized 

 in net loss (net of tax of $3,441) - - - - - - - - 6,420 - - 6,420 

 Reclassification adjustment for gains

 included in net loss (net of tax of $119) - - - - - - - - (220) - - (220)

 Unrealized gains on guaranty assets and 

 guaranty fee buy-ups - - - - - - - - 245 - - 245 

 Amortization of net cash flow hedging 

 gains - - - - - - - - 9 - - 9 

 Prior service cost and actuarial gains, net

 of amortization for defined benefit plans - - - - - - - - 107 - - 107 

Total comprehensive loss (60,525)

 Senior preferred stock dividends - - - - - - (2,470) - - - - (2,470)

 Increase to senior preferred liquidation 

 preference - - - 59,900 - - - - - - - 59,900 

 Conversion of convertible preferred stock 

 into common stock - (17) 27 - (874) 14 860 - - - - - 

 Other - - 1 - - - 72 2 - (54) - 20 

Balance as of December 31, 2009 1 580 1,113 $ 60,900 $ 20,348 $ 664 $ 2,083 $ (90,237) $ (1,732) $ (7,398) $ 91 $ (15,281)

Cumulative effect from the adoption of 

 the accounting guidance on transfers of 

 financial assets and consolidation - - - - - - - 6,706 (3,394) - (14) 3,298 

Balance as of January 1, 2010, adjusted 1 580 1,113 60,900 20,348 664 2,083 (83,531) (5,126) (7,398) 77 (11,983)

Change in investment in noncontrolling 

 interest - - - - - - - - - - 9 9 

Comprehensive loss:

Net loss - - - - - - - (14,014) - - (4) (14,018)

Other comprehensive income, net of tax effect:

Changes in net unrealized losses on 

 available-for-sale securities (net of tax

 of $1,644) - - - - - - - - 3,054 - - 3,054 

 Reclassification adjustment for other-than-

 temporary impairments recognized 

 in net loss (net of tax of $253) - - - - - - - - 469 - - 469 

 Reclassification adjustment for gains

 included in net loss (net of tax of $10) - - - - - - - - (19) - - (19)

 Unrealized gains on guaranty assets and 

 guaranty fee buy-ups - - - - - - - - 1 - - 1 

 Prior service cost and actuarial gains, net

 of amortization for defined benefit plans - - - - - - - - (61) - - (61)

Total comprehensive loss (10,574)

 Senior preferred stock dividends - - - - - - (2,265) (5,441) - - - (7,706)

 Increase to senior preferred liquidation 

 preference - - - 27,700 - - - - - - - 27,700 

 Conversion of convertible preferred stock 

 into common stock - (3) 5 - (144) 3 141 - - - - - 

 Other - - 1 - - - 41 - - (4) - 37 

Balance as of December 31, 2010 1 577 1,119 88,600 20,204 667 - (102,986) (1,682) (7,402) 82 (2,517)

 Change in investment in noncontrolling 

 interest - - - - - - - - - - (29) (29)

 Comprehensive loss: 

 Net loss - - - - - - - (16,855) - - - (16,855)

 Other comprehensive income, net of tax effect: 

 Changes in net unrealized losses on 

 available-for-sale securities (net of tax 

 of $250) - - - - - - - - 465 - - 465 

 Reclassification adjustment for other-than- 

 temporary impairments recognized 

 in net loss (net of tax of $99) - - - - - - - - 209 - - 209 

 Reclassification adjustment for gains 

 included in net loss (net of tax of $28) - - - - - - - - (52) - - (52)

 Prior service cost and actuarial gains, net 

 of amortization for defined benefit plans - - - - - - - - (175) - - (175)

 Total comprehensive loss (16,408)

 Senior preferred stock dividends - - - - - - (1,072) (8,541) - - - (9,613)

 Increase to senior preferred liquidation 

 preference - - - 23,978 - - - - - - - 23,978 

 Conversion of convertible preferred stock 

 into common stock - (21) 39 - (1,074) 20 1,054 - - - - - 

 Other - - - - - - 18 1 - (1) - 18 

Balance as of December 31, 2011 1 556 1,158 $ 112,578 $ 19,130 $ 687 $ - $ (128,381) $ (1,235) $ (7,403) $ 53 $ (4,571)

See Notes to Consolidated Financial Statements