Fannie Mae 2008 Annual Report Download - page 188

Table 48: Nonperforming Single-Family and Multifamily Loans
(1)
2008 2007 2006 2005 2004
As of December 31,
(Dollars in millions)
On-balance sheet nonperforming loans:
Nonaccrual loans
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,634 $ 8,343 $ 5,961 $ 8,356 $ 7,987
Troubled debt restructurings
(3)
. . . . . . . . . . . . . . . . . . . . . . . 1,931 1,765 1,086 661 816
HomeSaver Advance first-lien loans
(4)
. . . . . . . . . . . . . . . . . . 1,121 ————
Total on-balance sheet nonperforming loans . . . . . . . . . . . . . . 20,686 10,108 7,047 9,017 8,803
Off-balance sheet nonperforming loans:
(5)
Off-balance sheet nonperforming loans, excluding HomeSaver
Advance first-lien loans
(6)
. . . . . . . . . . . . . . . . . . . . . . . . 89,617 17,048 6,799 5,177 2,931
HomeSaver Advance first-lien loans
(7)
. . . . . . . . . . . . . . . . . . 8,929 ————
Total off-balance sheet nonperforming loans . . . . . . . . . . . . . 98,546 17,048 6,799 5,177 2,931
Total nonperforming loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . $119,232 $27,156 $13,846 $14,194 $11,734
Accruing on-balance sheet loans past due 90 days or more
(8)
. . . $ 317 $ 204 $ 147 $ 185 $ 187
Interest related to on-balance sheet nonperforming loans:
Interest income forgone
(9)
.......................... $ 401 $ 215 $ 163 $ 184 $ 188
Interest income recognized for the period
(10)
............. 771 328 295 405 381
(1)
Prior to 2008, the nonperforming loans that we reported consisted of on-balance sheet nonperforming loans held in
our mortgage portfolio and did not include off-balance nonperforming loans in Fannie Mae MBS held by third
parties. We have revised previously reported amounts to reflect the current period presentation.
(2)
Includes all nonaccrual loans inclusive of troubled debt restructurings and on-balance sheet HomeSaver Advance
first-lien loans on nonaccrual status.
(3)
A troubled debt restructuring is a modification to the contractual terms of a loan that results in a concession to a
borrower experiencing financing difficulty. The reported amounts represent troubled debt restructurings that are on
accrual status.
(4)
Represents the amount of on-balance sheet HomeSaver Advance first-lien loans on accrual status.
(5)
Represents unpaid principal balance of nonperforming loans in our outstanding and unconsolidated Fannie Mae MBS
trusts held by third parties.
(6)
Represents loans that would meet our criteria for nonaccrual status if the loans had been on-balance sheet.
(7)
Represents all off-balance sheet first-lien loans associated with unsecured HomeSaver Advance loans, including first-
lien loans that are not seriously delinquent.
(8)
Recorded investment of loans as of the end of each period that are 90 days or more past due and continuing to accrue
interest, including loans insured or guaranteed by the U.S. government and loans where we have recourse against the
seller of the loan in the event of a default.
(9)
Forgone interest income represents the amount of interest income that would have been recorded during the period
for on-balance sheet nonperforming loans as of the end of each period had the loans performed according to their
contractual terms.
(10)
Represents interest income recognized during the period for on-balance sheet loans classified as nonperforming as of
the end of each period.
Management of Problem Loans
In our experience, early intervention for a potential or existing problem is critical to helping borrowers avoid
foreclosure. If a borrower does not make the required payments, we work in partnership with the servicers of
our loans to offer workout solutions to minimize the likelihood of foreclosure as well as the severity of loss.
Our loan management strategy includes payment collection and workout guidelines designed to minimize the
number of borrowers who fall behind on their obligations and to help borrowers who are delinquent from
falling further behind on their payments.
The efforts of our mortgage servicers are critical in keeping people in their homes, preventing foreclosures and
providing homeowner assistance. We require our single-family servicers to pursue various resolutions of
problem loans as an alternative to foreclosure, and we continue to work with our servicers to implement our
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