Fannie Mae 2010 Annual Report Download - page 160

—Loan age. We monitor year of origination and loan age, which is defined as the number of years since
origination. Statistically, the peak ages for default are currently from two to six years after origination.
However, we have seen higher early default rates for loans originated in 2006 and 2007, due to a higher
number of loans originated during these years with risk layering. Risk layering means permitting a loan
to have several features that compound risk, such as loans with reduced documentation and higher risk
loan product types.
Table 40 presents our single-family conventional business volumes and our single-family conventional
guaranty book of business for the periods indicated, based on certain key risk characteristics that we use to
evaluate the risk profile and credit quality of our single-family loans.
Table 40: Risk Characteristics of Single-Family Conventional Business Volume and Guaranty Book of Business
(1)
2010 2009 2008 2010 2009 2008
Percent of Single-Family
Conventional Business Volume
(2)
For the Year Ended December 31,
Percent of Single-Family
Conventional Guaranty
Book of Business
(3)(4)
As of December 31,
(Dollars in millions)
Original LTV ratio:
(5)
G=60% ..................... 30% 33% 23% 24% 24% 22%
60.01% to 70% . . . . . . . . . . . . . . . . . 16 17 16 16 16 16
70.01% to 80% . . . . . . . . . . . . . . . . . 38 40 39 41 42 43
80.01% to 90%
(6)
............... 9 7 12 9 9 9
90.01% to 100%
(6)
.............. 5 3 10 9 9 10
Greater than 100%
(6)
............. 2 * * 1 * *
Total . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100% 100% 100%
Weighted average. . . . . . . . . . . . . . 68% 67% 72% 71% 71% 72%
Average loan amount . . . . . . . . . . . . . . $219,431 $219,118 $208,652 $155,531 $153,302 $148,824
Estimated mark-to-market LTV ratio:
(7)
G=60% ..................... 28% 31% 36%
60.01% to 70% . . . . . . . . . . . . . . . . . 13 13 13
70.01% to 80% . . . . . . . . . . . . . . . . . 19 19 17
80.01% to 90% . . . . . . . . . . . . . . . . . 15 14 14
90.01% to 100% . . . . . . . . . . . . . . . . 9 9 8
Greater than 100% . . . . . . . . . . . . . . 16 14 12
Total . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%
Weighted average. . . . . . . . . . . . . . 77% 75% 70%
Product type:
Fixed-rate:
(8)
Long-term . . . . . . . . . . . . . . . . . . . 72% 82% 78% 74% 75% 74%
Intermediate-term. . . . . . . . . . . . . . 22 15 12 14 13 13
Interest-only . . . . . . . . . . . . . . . . . * * 2 2 3 3
Total fixed-rate. . . . . . . . . . . . . . 94 97 92 90 91 90
Adjustable-rate:
Interest-only . . . . . . . . . . . . . . . . . 1 1 4 4 4 5
Negative-amortizing . . . . . . . . . . . . — * — * 1 1
Other ARMs . . . . . . . . . . . . . . . . . 5 2 4 6 4 4
Total adjustable-rate . . . . . . . . . 6 3 8 10 9 10
Total . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100% 100% 100%
Number of property units:
1unit........................ 98% 98% 97% 97% 96% 96%
2-4 units. . . . . . . . . . . . . . . . . . . . . . 2 2 3 3 4 4
Total . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100% 100% 100%
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