Freddie Mac 2014 Annual Report Download - page 105

100 Freddie Mac
The table below presents certain credit information about loans in our single-family credit guarantee portfolio by year of
origination as of December 31, 2014 and for the year then ended.
Table 43 — Single-Family Credit Guarantee Portfolio Data by Year of Origination(1)
December 31, 2014 Year Ended
December 31, 2014
Percent of
Portfolio
Average
Credit
Score(2) Original
LTV Ratio
Current
LTV
Ratio(3)
Current
LTV Ratio
>100%(3)(4)
Serious
Delinquency
Rate
Foreclosure
and Short
Sale Rate(5)
Percent
of Credit
Losses(4)
Year of Origination
2014 12% 748 76% 75% —% 0.02% —% —%
2013 16 754 71 63 — 0.06 — —
2012 14 761 69 56 — 0.09 0.01 —
2011 6 757 69 54 — 0.26 0.06 —
2010 6 754 69 56 — 0.46 0.15 1
2009 6 751 68 59 1 0.92 0.42 2
Subtotal - New single-
family book 60 755 71 62 — 0.24 0.14 3
HARP and other relief
refinance loans(6) 20 733 89 75 15 0.75 0.75 8
2005-2008 Legacy single-
family book 13 702 75 83 24 7.59 8.62 81
Pre-2005 Legacy single-
family book 7 709 73 47 2 3.10 1.42 8
Total 100% 740 75 66 6 1.88 100%
(1) Except for the foreclosure and short sale rate, the data presented is based on the loans remaining in the portfolio at December 31, 2014, which totaled
$1.7 trillion.
(2) Excludes less than 0.5% of loans in the portfolio because the credit scores at origination were not available.
(3) See endnote (3) to "Table 42 — Characteristics of the Single-Family Credit Guarantee Portfolio" for information about current LTV ratios.
(4) Within these columns, "—" represents less than 0.5%.
(5) Calculated for each year of origination as the number of loans that have proceeded to foreclosure transfer or short sale and resulted in a credit loss,
excluding any subsequent recoveries, during the period from origination to December 31, 2014, divided by the number of loans originated in that year
that were acquired in our single-family credit guarantee portfolio. The foreclosure and short sale rate presented for the Pre-2005 Legacy single-family
book represents the rate associated with loans originated in 2000 through 2004.
(6) HARP and other relief refinance loans are presented separately rather than in the year that the refinancing occurred (from 2009 to 2014). All other
refinance loans are presented in the year that the refinancing occurred.
Serious Delinquency Rates
We monitor the single-family serious delinquency rates of our portfolio, which are based on the number of loans that are
three monthly payments or more past due or in the process of foreclosure, as reported by our servicers. Single-family loans for
which the borrower is subject to a forbearance agreement or a repayment plan will continue to reflect the past due status of the
borrower. Our single-family delinquency rates include all single-family loans that we own, that back Freddie Mac securities,
and that are covered by our other guarantee commitments, except Freddie Mac financial guarantees that are backed by either
Ginnie Mae Certificates or HFA bonds due to the credit enhancements provided on them by the U.S. government.
Some of our workout and other loss mitigation activities create fluctuations in our delinquency statistics. For example,
single-family loans that we report as seriously delinquent before they enter a modification trial period continue to be reported
as seriously delinquent for purposes of our delinquency reporting until the modifications become effective and the loans are
removed from delinquent status by our servicers. Consequently, the volume and timing of loan modifications affect our
reported serious delinquency rate. In addition, there may be temporary lags in the reporting of payment status and modification
completion due to differing practices of our servicers that can affect our delinquency reporting.
In 2014, the serious delinquency rate of our single-family credit guarantee portfolio continued the trend of improvement
of the past several years, declining to 1.88% as of December 31, 2014 (which is the lowest level since January 2009) from
2.39% as of December 31, 2013. The improvement in our serious delinquency rate in 2014 is primarily due to lower volumes of
single-family loans becoming seriously delinquent, continued loss mitigation and foreclosure activities for loans in the Legacy
single-family books, and the sale of certain seriously delinquent loans. See "Managing Problem Loans" for additional
information about delinquency rates and concentrations of risk for loans in our single-family credit guarantee portfolio.
Although the serious delinquency rate for all our single-family loans was 1.88% at December 31, 2014, the rate for our
New single-family book was 0.24% at that date, which we believe reflects both improvements in underwriting and relatively
stable and improving economic conditions in recent years. Approximately one-half of our seriously delinquent single-family
loans were greater than one year past due at December 31, 2014. The gradual reduction of our 2005-2008 Legacy single-family
book has contributed to the improvement in the payment performance of our single-family credit guarantee portfolio.
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