Freddie Mac 2015 Annual Report Download - page 247

Financial Statements Notes to the Consolidated Financial Statements | Note 4
Freddie Mac 2015 Form 10-K 245
The table below presents our allowance for loan losses and our recorded investment in loans, held-for-
investment, by impairment evaluation methodology.
December 31, 2015 December 31, 2014
(in millions) Single-
family Multifamily Total Single- family Multifamily Total
Recorded investment:
Collectively evaluated $ 1,621,801 $ 30,728 $1,652,529 $1,568,237 $40,451 $1,608,688
Individually evaluated 91,528 475 92,003 100,383 902 101,285
Total recorded investment 1,713,329 31,203 1,744,532 1,668,620 41,353 1,709,973
Ending balance of the
allowance for loan losses:
Collectively evaluated (1,273) (18) (1,291) (3,847) (25)(3,872)
Individually evaluated (14,019) (21) (14,040) (17,837) (52) (17,889)
Total ending balance of the
allowance (15,292) (39) (15,331) (21,684) (77) (21,761)
Net investment in loans $ 1,698,037 $ 31,164 $1,729,201 $1,646,936 $41,276 $1,688,212
A significant number of unsecuritized single-family loans on our consolidated balance sheets are
individually evaluated for impairment while substantially all single-family loans held by our consolidated
trusts are collectively evaluated for impairment. The ending balance of the allowance for loan losses
associated with our held-for-investment unsecuritized loans represented approximately 10.8% and 12.7%
of the recorded investment in such loans at December 31, 2015 and 2014, respectively, and a substantial
portion of the allowance associated with these loans represented interest rate concessions provided to
borrowers as part of loan modifications. The ending balance of the allowance for loan losses associated
with loans held by our consolidated trusts represented approximately 0.2% of the recorded investment in
such loans as of both December 31, 2015 and 2014.
CREDIT PROTECTION AND OTHER FORMS OF CREDIT ENHANCEMENT
In connection with many of our single-family loans and other mortgage-related guarantees, we have
various forms of credit protection.
The table below presents the UPB of single-family loans on our consolidated balance sheets or
underlying certain of our financial guarantees with credit protection and the maximum amounts of
potential loss recovery by type of credit protection.
UPB(1) at Maximum Coverage(1)(2) at
(in millions) December 31,
2015 December 31, 2014 December 31, 2015 December 31, 2014
Primary mortgage insurance $ 257,063 $ 227,495 $ 65,760 $57,938
Other credit protection:
STACR debt note and ACIS
transactions(3) 241,450 144,272 14,916 6,657
Lender recourse and
indemnifications 6,339 6,527 5,396 6,092
Pool insurance(4) 1,706 2,284 753 947
HFA indemnification 2,599 3,357 2,599 3,324
Subordination 3,021 2,377 336 339
Other credit enhancements 15 20 10 18
Total $ 512,193 $ 386,332 $ 89,770 $75,315