Freddie Mac 2010 Annual Report Download - page 139

respectively. Serious delinquency rates of single-family 30-year, fixed rate amortizing loans, which is a more traditional
mortgage product, were 4% at both December 31, 2010, and December 31, 2009. The slight improvement in the single-
family serious delinquency rate during 2010 was primarily due to a higher volume of loan modifications and foreclosure
transfers, as well as a slowdown in new serious delinquencies. Although the volume of new serious delinquencies declined in
each quarter of 2010, our serious delinquency rate remains high, reflecting continued stress in the housing and labor markets.
In addition our serious delinquency rate has been negatively impacted by the decline in the total number of loans of our
single-family credit guarantee portfolio during 2010, which is the denominator used in our rate calculations.
During 2010 and 2009, home prices in certain regions and states improved modestly, but remained weak overall due to
significant inventories of unsold homes in every region of the U.S. In some geographical areas, particularly in certain states
within the West, Southeast and Northeast regions, the home price declines of the past three years combined with higher rates
of unemployment have resulted in persistently high serious delinquency rates. These increases in serious delinquency rates
have been more severe in Arizona, California, Florida, and Nevada. As of December 31, 2010, single-family loans in
California comprised 16% of our single-family credit guarantee portfolio; however, seriously delinquent loans in California
comprised more than 20% of the seriously delinquent loans in our single-family credit guarantee portfolio, based on UPB.
During 2010, we also continued to experience higher serious delinquency rates on single-family loans originated between
2005 and 2008. We purchased significant amounts of loans with higher-risk characteristics in those years. In addition, those
borrowers are more susceptible to the declines in home prices since 2006 than those homeowners that have built equity over
time.
Table 51 presents credit concentrations for certain loan groups in our single-family credit guarantee portfolio.
Table 51 — Credit Concentrations in the Single-Family Credit Guarantee Portfolio
Alt-A
UPB
Non Alt-A
UPB Total UPB
Estimated
Current LTV
Ratio
(1)
Percentage
Modified
(2)
Serious
Delinquency
Rate Alt-A Non Alt-A
As of December 31, 2010
2010 Credit Losses
(in billions) (in billions)
Geographical distribution:
Arizona, California, Florida, and Nevada . . . . . $47 $ 410 $ 457 91% 3.3% 7.1% $3.7 $5.0
All other states. . ..................... 69 1,283 1,352 73% 1.9% 3.0% 1.5 3.9
Year of origination:
2010 . . . . . . . . . ..................... — 323 323 70% — 0.1% — —
2009 . . . . . . . . . ..................... — 391 391 70% ⬍0.1% 0.3% — 0.1
2008 . . . . . . . . . ..................... 10 149 159 86% 2.2% 4.9% 0.2 0.8
2007 . . . . . . . . . ..................... 36 172 208 104% 6.2% 11.6% 1.9 2.8
2006 . . . . . . . . . ..................... 31 125 156 104% 5.8% 10.5% 1.9 2.3
2005 . . . . . . . . . ..................... 21 156 177 91% 3.3% 6.0% 1.1 1.7
All other years . . ..................... 18 377 395 58% 1.7% 2.5% 0.1 1.2
Alt-A
UPB
Non Alt-A
UPB Total UPB
Estimated
Current LTV
Ratio
(1)
Percentage
Modified
(2)
Serious
Delinquency
Rate Alt-A Non Alt-A
As of December 31, 2009
2009 Credit Losses
(in billions) (in billions)
Geographical distribution:
Arizona, California, Florida, and Nevada . . . . . $59 $ 421 $ 480 86% 1.1% 7.7% $2.7 $2.4
All other states. . ..................... 89 1,334 1,423 74% 0.9% 3.0% 0.8 2.0
Year of origination:
2009 . . . . . . . . . ..................... — 438 438 70% — 0.1% — —
2008 . . . . . . . . . ..................... 13 214 227 82% 0.3% 3.4% 0.1 0.3
2007 . . . . . . . . . ..................... 46 227 273 97% 1.8% 10.5% 1.4 1.4
2006 . . . . . . . . . ..................... 40 167 207 98% 1.9% 9.4% 1.6 1.2
2005 . . . . . . . . . ..................... 25 205 230 87% 1.2% 5.2% 0.3 0.9
All other years . . ..................... 24 504 528 58% 0.9% 2.2% 0.1 0.6
(1) See endnote (5) to “Table 42 — Characteristics of the Single-Family Credit Guarantee Portfolio” for information on our calculation of estimated current
LTV ratios.
(2) Represents the percentage of loans, based on loan count in our single-family credit guarantee portfolio, that have been modified under agreement with
the borrower, including those with no changes in interest rate or maturity date, but where past due amounts are added to the outstanding principal
balance of the loan.
136 Freddie Mac