Fannie Mae 2007 Annual Report Download - page 155

Table 43: Serious Delinquency Rates
Book
Outstanding
(1)
Serious
Delinquency
Rate
(2)
Book
Outstanding
(1)
Serious
Delinquency
Rate
(2)
Book
Outstanding
(1)
Serious
Delinquency
Rate
(2)
2007 2006 2005
As of December 31,
Conventional single-family delinquency
rates by geographic region:
(3)
Midwest . . . . . . . . . . . . . . . . . . . . . . . 17% 1.35% 17% 1.01% 17% 0.99%
Northeast . . . . . . . . . . . . . . . . . . . . . . 19 0.94 19 0.67 19 0.62
Southeast . . . . . . . . . . . . . . . . . . . . . . 25 1.18 24 0.68 23 0.83
Southwest. . . . . . . . . . . . . . . . . . . . . . 16 0.86 16 0.69 16 1.32
West . . . . . . . . . . . . . . . . . . . . . . . . . 23 0.50 24 0.20 25 0.19
Total conventional single-family
loans . . . . . . . . . . . . . . . . . . . . . . 100% 0.98% 100% 0.65% 100% 0.79%
(4)
Conventional single-family loans:
Credit enhanced . . . . . . . . . . . . . . . . . 21% 2.75% 19% 1.81% 18% 2.14%
Non-credit enhanced . . . . . . . . . . . . . . 79 0.53 81 0.37 82 0.47
Total conventional single-family
loans . . . . . . . . . . . . . . . . . . . . . . 100% 0.98% 100% 0.65% 100% 0.79%
(4)
Multifamily loans:
Credit enhanced . . . . . . . . . . . . . . . . . 88% 0.06% 96% 0.07% 95% 0.34%
Non-credit enhanced . . . . . . . . . . . . . . 12 0.22 4 0.35 5 0.02
Total multifamily loans . . . . . . . . . . . 100% 0.08% 100% 0.08% 100% 0.32%
(4)
(1)
Reported based on unpaid principal balance of loans, where we have detailed loan-level information.
(2)
Calculated based on number of loans for single-family and unpaid principal balance for multifamily. We include all of
the conventional single-family loans that we own and that back Fannie Mae MBS in the calculation of the single-
family delinquency rate. We include the unpaid principal balance of all multifamily loans that we own or that back
Fannie Mae MBS and any housing bonds for which we provide credit enhancement in the calculation of (2) the
multifamily serious delinquency rate.
(3)
See footnote 8 to Table 41 for states included in each geographic region.
(4)
The aftermath of Hurricane Katrina during the fourth quarter of 2005 resulted in an increase in our single-family and
multifamily serious delinquency rates. Our serious delinquency rate for single-family and multifamily, excluding the
impact of loans affected by Hurricane Katrina, was 0.64% and 0.12%, respectively.
We experienced a significant increase in our single-family serious delinquency rate as of December 31, 2007
from our rate as of December 31, 2006, due to the continued housing market downturn and decline in home
prices throughout much of the country, particularly in California, Florida, Nevada and Arizona, as well as due
to continued economic weakness in the Midwest, particularly in Ohio, Michigan and Indiana. We are
experiencing high serious delinquency rates across our conventional single-family mortgage credit book of
business, especially for loans to borrowers with low credit scores and loans with high LTV ratios. In addition,
in 2007 we experienced particularly rapid increases in serious delinquency rates in some higher risk loan
categories, such as Alt-A loans, adjustable-rate loans, interest-only loans, negative amortization loans, loans
made for the purchase of condominiums and loans with second liens. Many of these higher risk loans were
originated in 2006 and the first half of 2007.
The conventional single-family serious delinquency rates for California and Florida, which represent the two
largest states in our single-family mortgage credit book of business in terms of unpaid principal balance,
climbed to 0.50% and 1.59%, respectively, as of December 31, 2007, from 0.15% and 0.43%, respectively, as
of December 31, 2006. We expect the housing market to continue to deteriorate and home prices to continue
to decline in these states and on a national basis. Accordingly, we expect our single-family serious
delinquency rate to continue to increase in 2008.
The multifamily serious delinquency rate of 0.08% as of December 31, 2007 remained unchanged from the
rate as of December 31, 2006.
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