We are party to various types of legal actions and proceedings, including actions brought on behalf of various classes of

claimants. We also are subject to regulatory examinations, inquiries and investigations, and other information gathering

requests. In some of the matters, indeterminate amounts are sought. Modern pleading practice in the U.S. permits

considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to

specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to

invoke the jurisdiction of the trial court. This variability in pleadings, together with our and our counsel’s actual

experience in litigating or settling claims, leads us to conclude that the monetary relief that may be sought by plaintiffs

bears little relevance to the merits or disposition value of claims.

Legal actions and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with

assurance. Accordingly, the outcome of any given matter and the amount or range of potential loss at particular points in

time is frequently difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence

and the credibility and effectiveness of witness testimony, and how the court will apply the law. Disposition valuations

are also subject to the uncertainty of how opposing parties and their counsel may view the evidence and applicable law.

On a quarterly basis, we review relevant information about all pending legal actions and proceedings for the purpose of

evaluating and revising our contingencies, accruals and disclosures. We establish an accrual only for matters when the

likelihood of a loss is probable and we can reasonably estimate the amount of such loss. We are often unable to

estimate the possible losses or ranges of losses, particularly for proceedings that are in their early stages of

development, where plaintiffs seek indeterminate or unspecified damages, where there may be novel or unsettled legal

questions relevant to the proceedings, or where settlement negotiations have not occurred or progressed. Given the

uncertainties involved in any action or proceeding, regardless of whether we have established an accrual, the ultimate

resolution of certain of these matters may be material to our operating results for a particular period, depending on,

among other factors, the size of the loss or liability imposed and the level of our net income or loss for that period.

In addition to the matters specifically described below, we are involved in a number of legal and regulatory proceedings

that arise in the ordinary course of business that we do not expect will have a material impact on our business or

Senior Preferred Stock Purchase Agreements Litigation

A consolidated class action (“In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action

Litigations”) and a non-class action lawsuit, Fairholme Funds v. FHFA, filed by Fannie Mae and Freddie Mac

stockholders against us, FHFA as our conservator, and Freddie Mac are pending in the U.S. District Court for the District

of Columbia. The lawsuits challenge the August 2012 amendment to each company’s senior preferred stock purchase

Plaintiffs in these lawsuits allege that the net worth sweep dividend provisions of the senior preferred stock that were

implemented pursuant to the August 2012 amendments nullified certain of the stockholders’ rights and caused them

harm. Plaintiffs in the class action represent a class of Fannie Mae preferred stockholders and classes of Freddie Mac

common and preferred stockholders. On September 23, 2022, the court issued a summary judgment ruling that

permitted the plaintiffs in these lawsuits to present to a jury their claims for breach of the implied covenant of good faith

and fair dealing. The cases were consolidated for trial and a trial commenced on October 17, 2022, but resulted in a

mistrial after the jury could not reach a verdict. A second trial commenced on July 24, 2023. On August 14, 2023, the

jury returned a verdict for the plaintiffs and awarded damages of $299.4 million to Fannie Mae preferred stockholders.

On October 24, 2023, the court awarded these stockholders prejudgment interest on the damage award, to be

determined as simple interest, accruing from August 17, 2012 until the date on which judgment is entered at a fixed rate

of 5% over the Federal Reserve discount rate as of August 17, 2012. We have determined the prejudgment interest

through December 31, 2023 is $196 million. The parties will have an opportunity to file an appeal once the court enters

a final judgment. We evaluated the jury verdict and the court’s award of prejudgment interest and have established an

accrual for each, reflected as expense in “Other expenses, net” for the year ended December 31, 2023.

We have unconditional commitments related to the purchase of loans and mortgage-related securities. These include

both on- and off-balance sheet commitments. A portion of these have been recorded as derivatives in our consolidated

We lease certain premises and equipment under agreements that expire at various dates through August 31, 2037.

Some of these leases provide for payment by the lessee of property taxes, insurance premiums, cost of maintenance

and other costs. Rent expenses for operating leases were $106 million, $101 million and $108 million for the years

ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes by remaining maturity, non-cancelable future commitments related to loan and

mortgage purchases, operating leases and other agreements.


	As of December 31, 2023
	Loans and Mortgage- Related Securities(1)	Operating Leases(2)	Other(3)
	(Dollars in millions)
2024	$17,775	$81	$180
2025	—	81	133
2026	—	79	103
2027	—	79	91
2028	—	78	68
Thereafter	—	367	—
Total	$17,775	$765	$575

(1)Primarily includes mortgage commitment derivatives.

(2)Includes amounts related to office buildings and equipment leases.

(3)Includes purchase commitments for certain telecommunications services, computer software and services, and other agreements and