Fannie Mae 2010 Annual Report Download - page 165

Problem Loan Statistics
The following table displays the delinquency status of loans in our single-family conventional guaranty book
of business (based on number of loans) as of the periods indicated.
Table 41: Delinquency Status of Single-Family Conventional Loans
2010 2009 2008
As of December 31,
As of period end:
Delinquency status:
30 to 59 days delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.32% 2.46% 2.52%
60 to 89 days delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.87 1.07 1.00
Seriously delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.48 5.38 2.42
Percentage of seriously delinquent loans that have been delinquent for more than
180 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.30% 57.22% 40.00%
Early Stage Delinquency
The prolonged and severe decline in home prices, coupled with continued high unemployment, caused an
overall increase in the number of early stage delinquencies—loans that are less than three monthly payments
past due—over the past several years. The number of early stage delinquencies has decreased as of
December 31, 2010 compared with 2009; however, the potential number of loans at imminent risk of payment
default remains elevated.
Serious Delinquency
The potential number of loans at risk of becoming seriously delinquent has diminished in 2010. As of
December 31, 2010, the percentage and number of our single-family conventional loans that were seriously
delinquent decreased, as compared to December 31, 2009 and has decreased every month since February
2010. The decrease in our serious delinquency rate in 2010 is primarily the result of:
• Home retention workouts and foreclosure alternatives we completed.
• Higher volume of foreclosures during 2010.
• Higher percentage of our single-family guaranty book of business from 2009 and later vintages, which
have strong credit characteristics.
We expect serious delinquency rates will continue to be affected in the future by home price changes, changes
in other macroeconomic conditions, and the extent to which borrowers with modified loans again become
delinquent in their payments.
We continue to work with our servicers to reduce delays in determining and executing the appropriate workout
solution. However, the continued negative trends in the current economic environment, such as the sustained
weakness in the housing market and high unemployment, have continued to adversely affect the serious
delinquency rates across our single-family conventional guaranty book of business and the serious delinquency
rate remains elevated. Additionally, the period of time that loans are seriously delinquent continues to remain
extended as the factors present during 2009 were relatively unchanged during 2010. During 2009, the number
of loans that transitioned to seriously delinquent and the aging of our seriously delinquent loans increased
substantially from 2008 due to the following factors:
• Declines in home prices lengthen the period of time that loans are seriously delinquent because a
delinquent borrower may not have sufficient equity in the home to refinance or sell the property and
recover enough proceeds to pay off the loan and avoid foreclosure.
• High levels of unemployment are hampering the ability of many delinquent borrowers to cure
delinquencies and return their loans to current status.
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