Freddie Mac 2010 Annual Report Download - page 215

Table 6.2 presents the recorded investment of our single-family and multifamily mortgage loans by payment status.
Table 6.2 — Payment Status of Mortgage Loans
(1)
Current
One
Month
Past Due
Two
Months
Past Due
Three Months or
More Past Due,
or in Foreclosure Total Non-accrual
December 31, 2010
(in millions)
Single-family —
20 and 30-year or more, amortizing fixed-rate . . . . ....... $1,226,874 $26,442 $10,203 $51,604 $1,315,123 $51,507
15-year amortizing fixed-rate . . . .................... 248,572 1,727 450 1,628 252,377 1,622
Adjustable rate
(2)
............................... 53,205 826 335 2,308 56,674 2,303
Alt-A, interest-only, and option ARM
(3)
................ 137,395 5,701 3,046 28,679 174,821 28,620
Total single-family .............................. 1,666,046 34,696 14,034 84,219 1,798,995 84,052
Total multifamily ............................... 79,044 41 7 86 79,178 1,751
Total single-family and multifamily .................. $1,745,090 $34,737 $14,041 $84,305 $1,878,173 $85,803
(1) Based on recorded investment in the loan. Mortgage loans whose contractual terms have been modified under agreement with the borrower are not
counted as past due as long as the borrower is current under the modified terms. The payment status of a loan may be affected by temporary timing
differences, or lags, in the reporting of this information to us by our servicers. In addition, if a multifamily borrower has entered into a forbearance
agreement and is abiding by the terms of the agreement the borrower’s payment status is reflected as current, whereas single-family loans for which the
borrower has been granted forbearance will continue to reflect the past due status of the borrower, if applicable. As of December 31, 2010,
approximately $0.1 billion of multifamily loans had been granted forbearance and were not included in delinquency amounts.
(2) Includes balloon/reset mortgage loans and excludes option ARMs.
(3) See endnote (4) of “Table 5.2 — Recorded Investment of Held-for-Investment Mortgage Loans, by LTV Ratio.”
We have the option under our PC agreements to purchase mortgage loans from the loan pools that underlie our PCs
under certain circumstances to resolve an existing or impending delinquency or default. Our practice is to purchase and
effectively liquidate loans that are 120 days or more past due from PCs when: (a) the loans have been modified;
(b) foreclosure sales occur; (c) the loans have been delinquent for 24 months; or (d) the cost of guarantee payments to PC
holders, including advances of interest at the PC coupon rate, exceeds the expected cost of holding the non-performing
mortgage loans. On February 10, 2010, we announced that we would purchase substantially all single-family mortgage loans
that are 120 days or more delinquent from our PC trusts. This change in practice was made based on a determination that the
cost of guarantee, or debt payments to the security holders, will exceed the cost of holding nonperforming loans on our
consolidated balance sheets. Due to our January 1, 2010 adoption of amendments to the accounting standards for transfers of
financial assets and the consolidation of VIEs, the recognized cost of purchasing most delinquent loans from PC trusts will
be less than the recognized cost of continued guarantee payments to security holders. As of December 31, 2010, there were
$5.2 billion in UPB of loans that were four monthly payments past due, and that met our repurchase criteria. In certain cases
we purchased and in others we expect to purchase, and thereby extinguish the related PC debt, at the scheduled PC debt
payment date, unless the loans proceed to foreclosure transfer, complete a foreclosure alternative or otherwise cure by receipt
of payment by the borrower before such date.
When we purchase mortgage loans from consolidated trusts, we reclassify the loans from mortgage loans held-for-
investment by consolidated trusts to unsecuritized mortgage loans held-for-investment and record an extinguishment of the
corresponding portion of the debt securities of the consolidated trusts. We purchased $127.5 billion and $10.8 billion in UPB
of loans from PC trusts or associated with other guarantee commitments during the years ended December 31, 2010 and
2009, respectively. Beginning January 1, 2010, we no longer record losses on loans purchased when we purchase loans from
PCs associated with consolidated trusts since these loans are already recorded on our consolidated balance sheets. See
“NOTE 2: CHANGE IN ACCOUNTING PRINCIPLES” for further information. We recognized losses on loans purchased of
$25 million and $4.8 billion in 2010 and 2009, respectively, related to purchases of loans from PC trusts or associated with
other guarantee commitments that are included within other expenses on our consolidated statements of operations.
212 Freddie Mac