Fannie Mae 2010 Annual Report Download - page 169

Table 44: Statistics on Single-Family Loan Workouts
Unpaid
Principal
Balance
Number
of Loans
Unpaid
Principal
Balance
Number
of Loans
Unpaid
Principal
Balance
Number
of Loans
2010 2009 2008
For the Year Ended
(Dollars in millions)
Home retention strategies:
Modifications . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,826 403,506 $18,702 98,575 $ 5,119 33,388
Repayment plans and forbearances completed
(1)
. . 4,385 31,579 2,930 22,948 936 7,892
HomeSaver Advance first-lien loans. . . . . . . . . . 688 5,191 6,057 39,199 11,196 70,967
$ 87,899 440,276 $27,689 160,722 $17,251 112,247
Foreclosure alternatives:
Preforeclosure sales . . . . . . . . . . . . . . . . . . . . . $ 15,899 69,634 $ 8,457 36,968 $ 2,212 10,355
Deeds-in-lieu of foreclosure . . . . . . . . . . . . . . . 1,053 5,757 491 2,649 252 1,341
$ 16,952 75,391 $ 8,948 39,617 $ 2,464 11,696
Total loan workouts . . . . . . . . . . . . . . . . . . . . . . . $104,851 515,667 $36,637 200,339 $19,715 123,943
Loan workouts as a percentage of single-family
guaranty book of business
(2)
. . . . . . . . . . . . . . . 3.66% 2.87% 1.26% 1.10% 0.70% 0.68%
(1)
For the years ended December 31, 2010 and 2009, repayment plans reflected those plans associated with loans that
were 60 days or more delinquent. For the year ended December 31, 2008, repayment plans reflected those plans
associated with loans that were 90 days or more delinquent. If we had included repayment plans associated with loans
that were 60 days or more delinquent for the year ended December 31, 2008, the unpaid principal balance that had
repayment plans and forbearances completed would have been $2.8 billion and the number of loans that had
repayment plans and forbearances completed would have been 22,337.
(2)
Represents total loan workouts during the period as a percentage of our single-family guaranty book of business as of
the end of each year.
We increased the volume of workouts during 2010 compared with 2009, through our home retention and
foreclosure prevention efforts. Loan modification volume was more than four times larger in 2010 than in
2009, as the number of borrowers who were experiencing financial difficulty increased and a significant
number of HAMP trial modifications were completed and became permanent HAMP modifications.
HomeSaver Advance workout volume substantially declined and this workout option was ultimately retired in
2010. HomeSaver Advances were only used in limited circumstances as a result of more borrowers facing
permanent, instead of short-term, hardships as well as our requirement that all potential loan workouts first be
evaluated under HAMP before being considered for other alternatives. We also agreed to an increasing number
of preforeclosure sales and accepted a higher number of deeds-in-lieu of foreclosure during 2010 as these are
favorable solutions for a growing number of borrowers. The volume of our foreclosure alternatives remained
high throughout 2010.
Because we did not begin implementing HAMP until March 2009, the vast majority of loan modifications
performed during 2009 were not made under HAMP; during 2010, slightly less than half of our loan
modifications were completed under HAMP. During 2010, we initiated approximately 163,000 trial
modifications under HAMP, along with other types of loan modifications, repayment plans and forbearance
compared with 333,000 during 2009. It is difficult to predict how many of these trial modifications and
initiated plans will be completed. During 2009, there were only a limited number of permanent HAMP
modifications because the program entails at least a three month trial period. During this trial period, the loan
servicer evaluates the borrower’s ability to make the required modified loan payment and collects all required
documentation before making the modification effective. The inability to obtain proper documentation from
borrowers who had entered into a trial modification was a significant factor in the low number of
modifications that became permanent under HAMP in 2009. In a February 2010 announcement, as directed by
Treasury, servicers are required to conduct a full verification of a borrower’s eligibility prior to offering a
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