MetLife 2012 Annual Report Download - page 128

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
Impaired Mortgage Loans
Information regarding impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, by portfolio segment,
were as follows at and for the periods ended:
Loans with a Valuation Allowance Loans without a Valuation Allowance All Impaired Loans
December 31,
Unpaid
Principal
Balance Recorded Investment Valuation Allowances Carrying Value
Unpaid
Principal
Balance Recorded Investment
Unpaid
Principal
Balance Carrying Value
Average
Recorded
Investment Interest Income
(In millions)
2012:
Commercial ..................... $445 $436 $ 94 $342 $103 $103 $548 $445 $464 $14
Agricultural ...................... 110 107 21 86 79 74 189 160 204 8
Residential ...................... 13 13 2 11 — — 13 11 13 —
Total ......................... $568 $556 $117 $439 $182 $177 $750 $616 $681 $22
2011:
Commercial ..................... $ 96 $ 96 $ 59 $ 37 $252 $237 $348 $274 $313 $ 6
Agricultural ...................... 160 159 45 114 71 69 231 183 252 5
Residential ...................... 13 13 1 12 1 1 14 13 23 —
Total ......................... $269 $268 $105 $163 $324 $307 $593 $470 $588 $11
Unpaid principal balance is generally prior to any charge-offs. Interest income recognized is primarily cash basis income. The average recorded
investment for commercial, agricultural and residential mortgage loans was $192 million, $284 million, $16 million, respectively, for the year ended
December 31, 2010; and interest income recognized for commercial, agricultural and residential mortgage loans was $6 million, $8 million and $0,
respectively, for the year ended December 31, 2010.
Mortgage Loans Modified in a Troubled Debt Restructuring
For a small portion of the mortgage loan portfolio, classified as troubled debt restructurings, concessions are granted related to borrowers
experiencing financial difficulties. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at
an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concession granted
is considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous
monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt
restructuring. Accordingly, the carrying value (after specific valuation allowance) before and after modification through a troubled debt restructuring may
not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. The number of mortgage
loans and carrying value after specific valuation allowance of mortgage loans modified during the period in a troubled debt restructuring were as follows:
For the Years Ended December 31,
2012 2011
Number of
Mortgage
Loans Carrying Value after Specific Valuation Allowance
Number of
Mortgage
Loans Carrying Value after Specific Valuation Allowance
Pre-
Modification Post- Modification Pre- Modification Post- Modification
(In millions) (In millions)
Commercial .......................................... 1 $222 $199 5 $147 $111
Agricultural ........................................... 5 17 16 10 42 42
Residential ........................................... — — — — — —
Total ............................................. 6 $239 $215 15 $189 $153
There were no mortgage loans during the previous 12 months modified in a troubled debt restructuring with a subsequent payment default at
December 31, 2012. During the 12 months ended December 31, 2011, the Company had four agricultural mortgage loans, with a carrying value after
specific valuation allowance of $13 million, modified in a troubled debt restructuring with a subsequent payment default. Payment default is determined
in the same manner as delinquency status — when interest and principal payments are past due.
122 MetLife, Inc.