Fannie Mae 2006 Annual Report Download - page 266

Nonaccrual Loans
We have single-family and multifamily loans in our portfolio, including those loans accounted for under
SOP 03-3, that are subject to our nonaccrual policy. The following table displays information about nonaccrual
loans in our portfolio as of December 31, 2006 and 2005.
2006 2005
As of December 31,
(Dollars in millions)
Nonaccrual loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,961 $ 8,356
Accrued interest recorded on nonaccrual loans
(1)
.............................. 145 198
Accruing loans past due 90 days or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 185
Nonaccrual loans in portfolio (number of loans) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,392 82,141
(1)
Reflects accrued interest on nonaccrual loans that was recorded prior to their placement on nonaccrual status.
Forgone interest on nonaccrual loans, which represents the amount of income contractually due that we would
have reported had the loans performed according to their contractual terms, was $141 million, $169 million
and $178 million for the years ended December 31, 2006, 2005 and 2004, respectively.
Impaired Loans
Impaired loans include single-family and multifamily TDRs, certain single-family and multifamily loans that
are individually impaired as a result of Hurricane Katrina and SOP 03-3, and other multifamily loans.
SOP 03-3 Impaired Loans without a Loss Allowance
The total recorded investment of impaired loans acquired under SOP 03-3 for which we did not recognize a
loss allowance subsequent to acquisition was $1.1 billion and $1.9 billion as of December 31, 2006 and 2005,
respectively. The amount of interest income recognized on these impaired loans was $5 million and $2 million
for the years ended December 31, 2006 and 2005, respectively. Our average recorded investment in these loans
was $1.4 billion and $950 million for the years ended December 31, 2006 and 2005, respectively.
Other Impaired Loans
The following table displays the total recorded investment and the corresponding specific loss allowances as of
December 31, 2006 and 2005 of all other impaired loans including impaired loans acquired under SOP 03-3
for which we recognized a loss allowance subsequent to acquisition.
2006 2005
As of December 31,
(Dollars in millions)
Impaired loans with an allowance
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,971 $1,595
Impaired loans without an allowance
(2)
...................................... 313 466
Total other impaired loans
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,284 $2,061
Allowance for impaired loans
(4)
........................................... $ 106 $ 66
(1)
Includes $754 million and $907 million of mortgage loans accounted for in accordance with SOP 03-3 for which a
loss allowance was recorded subsequent to acquisition as of December 31, 2006 and 2005, respectively.
(2)
The discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, and as
such, no allowance is required.
(3)
Includes single-family loans individually impaired and restructured in a TDR of $1.9 billion and $1.5 billion as of
December 31, 2006 and 2005, respectively. Includes multifamily loans individually impaired and restructured in a
TDR of $324 million and $507 million as of December 31, 2006 and 2005, respectively.
(4)
Amount is included in the “Allowance for loan losses.”
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FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)