Freddie Mac 2014 Annual Report Download - page 100

95 Freddie Mac
The table below provides characteristics of single-family mortgage loans purchased or covered by other guarantee
commitments during 2014, 2013, and 2012, based on UPB.
Table 40 — Characteristics of Purchases for the Single-Family Credit Guarantee Portfolio(1)
Percent of Purchases During the Year Ended December 31,
2014 2013 2012
Relief Refi All Other Total Relief Refi All Other Total Relief Refi All Other Total
Original LTV Ratio Range
60% and below 2% 14% 16% 3% 19% 22% 4% 21% 25%
Above 60% to 70% 1 11 12 2 12 14 2 12 14
Above 70% to 80% 2 40 42 3 33 36 3 29 32
Above 80% to 100% 3 24 27 7 13 20 8 9 17
Above 100% to 125% 2 — 2 5 — 5 7 — 7
Above 125% 1 — 1 3 — 3 5 — 5
Total 11% 89% 100% 23% 77% 100% 29% 71% 100%
Weighted average original LTV ratio 82% 76% 76% 91% 71% 75% 97% 68% 76%
Credit Score
740 and above 5% 56% 61% 11% 55% 66% 17% 55% 72%
700 to 739 2 20 22 5 15 20 6 11 17
660 to 699 2 10 12 4 6 10 4 4 8
620 to 659 1 3 4 2 1 3 1 1 2
Less than 620 1 — 1 1 — 1 1 — 1
Total 11% 89% 100% 23% 77% 100% 29% 71% 100%
Weighted average credit score:
Total mortgages 713 748 744 727 756 749 740 762 756
Percent of Purchases During the Year Ended
December 31,
2014 2013 2012
Loan Purpose
Purchase 52% 27% 18%
Cash-out refinance 17 16 15
Other refinance(2) 31 57 67
Total 100% 100% 100%
Property Type
Detached/townhome(3) 92% 93% 94%
Condo/Co-op 8 7 6
Total 100% 100% 100%
Occupancy Type
Primary residence 88% 88% 91%
Second/vacation home 4 4 4
Investment 8 8 5
Total 100% 100% 100%
(1) Within this table, "—" represents less than 0.5%.
(2) Other refinance loans include: (a) refinance mortgages with “no cash out” to the borrower; and (b) refinance mortgages for which the delivery data
provided was not sufficient for us to determine whether the mortgage was a cash-out or a no cash-out refinance transaction.
(3) Includes manufactured housing and homes within planned unit development communities.
Transferring a Portion of our Mortgage Credit Risk
As guarantor, we remain responsible for the payment of principal and interest on our PCs regardless of whether the
borrower performs on the underlying mortgage loan. We also are subject to mortgage credit risk for unsecuritized loans. We use
credit enhancements to transfer a portion of our mortgage credit risk and mitigate some of our potential credit losses. By
transferring a portion of the credit risk associated with mortgage loans in our single-family credit guarantee portfolio, we
reduce our exposure to loss and, consequently, the amount of capital that would be required to operate our business. Credit
enhancements include: (a) primary mortgage insurance; (b) STACR and ACIS risk transfer transactions; (c) pool insurance; and
(d) recourse to lenders.
Our charter requires that single-family mortgages with LTV ratios above 80% at the time of purchase be covered by
specified credit enhancements. Our sellers require the borrower to purchase primary mortgage insurance at the origination of
the mortgage if the LTV ratio is above 80% in order to meet our requirements (subject to certain exceptions, such as HARP).
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