Freddie Mac 2010 Annual Report Download - page 102

MORTGAGE LOANS AND LOAN LOSS RESERVES” for characteristics and other information, including amounts and
changes in our loan loss reserves, as well as a reconciliation of the UPB amounts of our mortgage loans to the amounts
recorded on our consolidated balance sheets.
The UPB of unsecuritized single-family mortgage loans increased by $94.0 billion, to $148.9 billion at December 31,
2010 from $54.9 billion at December 31, 2009, primarily due to increased purchases of seriously delinquent and modified
loans from the mortgage pools underlying our PCs. As guarantor, we have the right to purchase mortgages that back our PCs
from the underlying loan pools when they are significantly past due or when we determine that loss of the property is likely
or default by the borrower is imminent due to borrower incapacity, death or other extraordinary circumstances that make
future payments unlikely or impossible. This right to repurchase mortgages is known as our repurchase option, and we also
exercise this option when we modify a mortgage. See “NOTE 6: INDIVIDUALLY IMPAIRED AND NON-PERFORMING
LOANS” for more information on our purchases of single-family loans from PC pools.
The UPB of multifamily mortgage loans increased to $85.9 billion at December 31, 2010 from $83.9 billion at
December 31, 2009, due to increased purchases of loans that we expect to securitize through our CME initiative. Our
multifamily loan sales in 2010 primarily consisted of sales through Other Guarantee Transactions. Subject to market
conditions, we expect to increase sales of multifamily mortgage loans through our Other Guarantee Transactions which may
reduce the outstanding UPB of our multifamily loan portfolio in future periods.
Table 29 summarizes our purchase and guarantee activity in mortgage loans for the years ended December 31, 2010,
2009, and 2008. Activity for the year ended December 31, 2010 consists of: (a) mortgage loans underlying consolidated
single-family PCs and certain Other Guarantee Transactions (regardless of whether such securities are held by us or third
parties); (b) unsecuritized single-family and multifamily mortgage loans; and (c) mortgage loans underlying our mortgage-
related financial guarantees which are not consolidated on our balance sheets. Activity for the years ended December 31,
2009 and 2008 consists of: (a) mortgage loans underlying Freddie Mac mortgage-related securities (regardless of whether
such securities are held by us or third parties) which were not consolidated on our balance sheets prior to January 1, 2010;
(b) unsecuritized single-family and multifamily mortgage loans on our consolidated balance sheets; and (c) mortgage loans
associated with other guarantee commitments.
Table 29 — Mortgage Loan Purchase and Other Guarantee Commitment Activity
(1)
Purchase
Amount
%of
Purchases
Purchase
Amount
%of
Purchases
Purchase
Amount
%of
Purchases
2010 2009 2008
Year Ended December 31,
(dollars in millions)
Mortgage loan purchases and guarantee issuances:
Single-family:
30-year or more amortizing fixed-rate .................... $258,621 64% $392,291 80% $284,029 75%
20-year amortizing fixed-rate . . . . . ..................... 23,852 6 11,895 2 7,303 2
15-year amortizing fixed-rate . . . . . ..................... 83,025 21 64,590 13 29,671 8
Adjustable-rate
(2)
.................................. 16,534 4 2,809 1 11,723 3
Interest-only
(3)
.................................... 909 G1 845 G1 24,063 6
HFA bonds....................................... 2,469 1 802 G1——
FHA/VA and USDA Rural Development
(4)
................. 968 G1 2,118 G1 796 G1
Total single-family
(5)
.............................. 386,378 96% 475,350 97% 357,585 94%
Multifamily
(6)
...................................... 15,372 4 16,571 3 23,972 6
Total mortgage loan purchases and other guarantee
commitment activity
(7)
.......................... $401,750 100% $491,921 100% $381,557 100%
Percentage of mortgage purchases and other guarantee commitment
activity with credit enhancements
(8)
........................ 9% 8% 21%
(1) Based on UPB. Excludes mortgage loans traded but not yet settled. Excludes net additions of seriously delinquent loans and balloon/reset mortgages
purchased out of PC pools. Includes other guarantee commitments associated with mortgage loans. See endnotes (6) and (7) for further information.
(2) Includes amortizing ARMs with 1-, 3-, 5-, 7- and 10-year initial fixed-rate periods. We did not purchase any option ARM loans during 2010, 2009, or
2008.
(3) Represents loans where the borrower pays interest only for a period of time before the borrower begins making principal payments. Includes both
fixed-rate and variable-rate interest-only loans.
(4) Excludes FHA/VA loans that back Other Guarantee Transactions.
(5) Includes $23.9 billion, $26.3 billion, and $2.6 billion of mortgage loans in excess of $417,000, which are referred to as conforming jumbo mortgages,
for the years ended December 31, 2010, 2009, and 2008, respectively.
(6) Includes $572 million and $14 million as of December 31, 2010 and 2009, respectively, of our unsecuritized guarantees of HFA bonds under the
TCLFP. See “NOTE 3: CONSERVATORSHIP AND RELATED MATTERS — Housing Finance Agency Initiative” for further information on this
component of the Housing Finance Agency Initiative.
(7) Includes issuances of other guarantee commitments on single-family loans of $5.7 billion, $2.4 billion, and $1.6 billion and issuances of other
guarantee commitments on multifamily loans of $1.7 billion, $0.5 billion, and $4.4 billion during the years ended December 31, 2010, 2009, and 2008,
respectively.
(8) See “NOTE 5: MORTGAGE LOANS AND LOAN LOSS RESERVES — Credit Protection and Other Forms of Credit Enhancement” for further
details on credit enhancement of mortgage loans in our single-family credit guarantee portfolio.
99 Freddie Mac