Fannie Mae 2008 Annual Report Download - page 114

Table 10: Credit-Related Expenses
2008 2007 2006
For the Year Ended
December 31,
(Dollars in millions)
Provision for credit losses attributable to guaranty book of business . . . . . . . . . . . . . . . . . . . $25,522 $3,200 $385
Provision for credit losses attributable to SOP 03-3 and HomeSaver Advance fair value
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,429 1,364 204
Total provision for credit losses
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,951 4,564 589
Foreclosed property expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,858 448 194
Credit-related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,809 $5,012 $783
(1)
Reflects total provision for credit losses reported in our consolidated statements of operations and in Table 11 below.
Provision Attributable to Guaranty Book of Business
Our allowance for loan losses and reserve for guaranty losses, which we collectively refer to as our combined
loss reserves, provide for probable credit losses inherent in our guaranty book of business as of each balance
sheet date. We build our loss reserves through the provision for credit losses for losses that we believe have
been incurred and will eventually be reflected over time in our charge-offs. When we determine that a loan is
uncollectible, we record the charge-off against our loss reserves. We record recoveries of previously charged-
off amounts as a credit to our loss reserves. Table 11, which summarizes changes in our loss reserves for the
five-year period ended December 31, 2008, details the provision for credit losses recognized in our
consolidated statements of operations each period and the charge-offs recorded against our combined loss
reserves.
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