Freddie Mac 2010 Annual Report Download - page 136

Table 48 presents volumes of single-family workouts, serious delinquency, and foreclosures for the years ended 2010,
2009, and 2008.
Table 48 — Single Family Loan Workouts, Serious Delinquency, and Foreclosure Volumes
(1)
Number of
Loans
Loan
Balances
Number of
Loans
Loan
Balances
Number of
Loans
Loan
Balances
2010 2009 2008
Years Ended December 31,
(dollars in millions)
Home retention actions:
Loan modifications
(2)
with no change in terms
(3)
............................. 4,639 $ 799 5,866 $ 1,008 10,122 $ 1,524
with extension of loan terms ............................ 20,664 3,602 15,596 2,500 9,401 1,549
with reduction of contractual interest rate . . . . ............... 48,749 10,838 2,375 562 15,465 3,315
with rate reduction and term extension . . . . . . ............... 65,937 14,439 38,540 8,043 96 18
with rate reduction, term extension and principal forbearance . . . . . 30,288 7,915 2,667 621 — —
Total loan modifications
(4)
................................. 170,277 37,593 65,044 12,734 35,084 6,406
Repayment plans
(5)
..................................... 31,210 4,523 33,725 4,711 42,062 5,768
Forbearance agreements
(6)
................................. 34,594 7,156 14,628 2,848 4,192 518
Total home retention actions: . . ............................. 236,081 49,272 113,397 20,293 81,338 12,692
Foreclosure alternatives:
Short sale
(7)
.......................................... 38,773 9,109 18,890 4,481 5,333 1,208
Deed-in-lieu transactions.................................. 402 63 329 56 200 32
Total foreclosure alternatives . . ............................. 39,175 9,172 19,219 4,537 5,533 1,240
Total single-family loan workouts .......................... 275,256 $58,444 132,616 $24,830 86,871 $13,932
Delinquent loan additions ................................. 502,710 597,188 340,094
Single-family foreclosures
(8)
............................... 142,877 90,436 53,371
Delinquent loans, at period end ............................. 462,439 498,829 231,426
(1) Based on completed actions with borrowers for loans within our single-family credit guarantee portfolio. Excludes those modification, repayment and
forbearance activities for which the borrower has started the required process, but the actions have not been made permanent, or effective, such as loans
in the trial period under HAMP. Also excludes certain loan workouts where our single-family seller/servicers have executed agreements in the currentor
prior periods, but these have not been incorporated into certain of our operational systems, due to delays in processing. These categories are not
mutually exclusive and a loan in one category may also be included within another category in the same period (see endnote 6).
(2) Includes approximately 128,000, 4,000, and 2,000 TDRs during the years ended December 31, 2010, 2009 and 2008, respectively.
(3) Under this modification type, past due amounts are added to the principal balance and reamortized based on the original contractual loan terms.
(4) Includes completed loan modifications under HAMP; however, the number of such completions differs from that reported by the MHA Program
administrator in part due to differences in the timing of recognizing the completions by us and the administrator.
(5) Represents the number of borrowers as reported by our seller/servicers that have completed the full term of a repayment plan for past due amounts.
Excludes the number of borrowers that are actively repaying past due amounts under a repayment plan, which totaled 23,151 and 35,608 borrowers as
of December 31, 2010 and 2009, respectively.
(6) Excludes loans with long-term forbearance under a completed loan modification. Many borrowers complete a short-term forbearance agreement before a
loan workout is pursued or completed. Our reported activity has been revised such that we only report forbearance activity for a single loan once during
each quarterly period; however, a single loan may be included under separate forbearance agreements in separate periods.
(7) In 2010, we began to exclude third-party sales at foreclosure auction from our short sale results. Prior period amounts have been revised to conformto
the current period presentation. See endnote (8).
(8) Represents the number of our single-family loans that complete foreclosure transfers, including third-party sales at foreclosure auction in which
ownership of the property is transferred directly to a third-party rather than to us.
We had significant increases in single-family loan workout activity, particularly loan modifications and short sales
during the year ended December 31, 2010 compared to the year ended December 31, 2009. Loan modifications may include
the additions of past due amounts to principal, interest rate reductions, term extensions and principal forbearance. Although
HAMP contemplates that some servicers will also make use of principal reduction to achieve reduced payments for
borrowers, we only used forbearance in 2009 and 2010 and did not use principal reduction in modifying our loans. In the
second quarter of 2010, we implemented a temporary streamlined alternative loan modification process for single-family
borrowers who completed an existing trial period but did not qualify for a permanent modification under HAMP. We refer to
this initiative as the HAMP backup modification and it was offered for modifications completed on or before December 1,
2010. This temporary non-HAMP modification program was intended to minimize the need for additional documentation.
We paid servicer incentive fees on our HAMP backup modifications that differed in amount from the incentive fees that are
paid under HAMP. We did not offer borrower incentive fees under our HAMP backup modification. We completed only a
modest number of HAMP backup modifications in 2010. If the borrower was not eligible for this program, the borrower was
considered for other workout activities, such as another type of non-HAMP modification or a short sale.
We completed 38,773 short sales during the year ended December 31, 2010, compared to 18,890 in the year ended
December 31, 2009. We expect that the growth in short sales will continue, in part due to our implementation of HAFA
effective August 1, 2010 and also due to incentives we provide to servicers to complete short sales instead of foreclosures.
133 Freddie Mac