MetLife 2002 Annual Report Download - page 64

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Mortgage Loans on Real Estate
Mortgage loans on real estate were categorized as follows:
December 31,
2002 2001
Amount Percent Amount Percent
(Dollars in millions)
Commercial mortgage loans************************************************** $19,671 78% $18,093 76%
Agricultural mortgage loans*************************************************** 5,152 20 5,277 22
Residential mortgage loans*************************************************** 389 2 395 2
Total****************************************************************** 25,212 100% 23,765 100%
Less: Valuation allowances *************************************************** 126 144
Mortgage loans ******************************************************** $25,086 $23,621
Mortgage loans on real estate are collateralized by properties primarily located throughout the United States. At December 31, 2002, approximately
18%, 8% and 8% of the properties were located in California, New York and Florida, respectively. Generally, the Company (as the lender) requires that a
minimum of one-fourth of the purchase price of the underlying real estate be paid by the borrower.
Certain of the Company’s real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgages were
$620 million and $644 million at December 31, 2002 and 2001, respectively.
Changes in mortgage loan valuation allowances were as follows:
Years Ended December 31,
2002 2001 2000
(Dollars in millions)
Balance at January 1 ************************************************************************* $144 $ 83 $ 90
Additions *********************************************************************************** 41 106 38
Deductions for writedowns and dispositions ****************************************************** (59) (45) (74)
Acquisitions of affiliates *********************************************************************** ——29
Balance at December 31********************************************************************** $126 $144 $ 83
A portion of the Company’s mortgage loans on real estate was impaired and consisted of the following:
December 31,
2002 2001
(Dollars in millions)
Impaired mortgage loans with valuation allowances ********************************************************** $627 $ 816
Impaired mortgage loans without valuation allowances******************************************************** 261 324
Total ********************************************************************************************* 888 1,140
Less: Valuation allowances on impaired mortgages ********************************************************** 125 140
Impaired mortgage loans **************************************************************************** $763 $1,000
The average investment in impaired mortgage loans on real estate was $1,088 million, $947 million and $912 million for the years ended
December 31, 2002, 2001 and 2000, respectively. Interest income on impaired mortgage loans was $91 million, $103 million and $80 million for the
years ended December 31, 2002, 2001 and 2000, respectively.
The investment in restructured mortgage loans on real estate was $414 million and $685 million at December 31, 2002 and 2001, respectively.
Interest income of $44 million, $76 million and $77 million was recognized on restructured loans for the years ended December 31, 2002, 2001 and
2000, respectively. Gross interest income that would have been recorded in accordance with the original terms of such loans amounted to $41 million,
$60 million and $74 million for the years ended December 31, 2002, 2001 and 2000, respectively.
Mortgage loans on real estate with scheduled payments of 60 days (90 days for agriculture mortgages) or more past due or in foreclosure had an
amortized cost of $40 million and $53 million at December 31, 2002 and 2001, respectively.
MetLife, Inc.
F-20