Fannie Mae 2010 Annual Report Download - page 315

(4)
Represents reclassification of amounts recorded in provision for loan losses and charge-offs that relate to allowance for
accrued interest receivable and preforeclosure property taxes and insurance receivable from borrowers.
(5)
Total allowance for loan losses includes $385 million, $726 million and $150 million as of December 31, 2010, 2009
and 2008, respectively, for acquired credit-impaired loans.
(6)
Total single-family allowance for loan losses was $8.5 billion and $2.7 billion as of December 31, 2009 and 2008,
respectively. Total multifamily allowance for loan losses was $1.4 billion and $74 million as of December 31, 2009
and 2008, respectively.
As of December 31, 2010, the allowance for accrued interest receivable for loans of Fannie Mae and loans of
consolidated trusts was $3.0 billion and $439 million, respectively. The allowance for accrued interest
receivable was $536 million as of December 31, 2009.
The following table displays the allowance for loan losses and total recorded investment in our HFI loans,
excluding loans for which we have elected the fair value option, by impairment or reserve methodology and
portfolio segment as of December 31, 2010.
Single-Family Multifamily Total
As of December 31, 2010
(Dollars in millions)
Allowance for loan losses by segment:
Individually impaired loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 37,296 $ 549 $ 37,845
Collectively reserved loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,306 1,020 23,326
Acquired credit impaired loans . . . . . . . . . . . . . . . . . . . . . . . . . 378 7 385
Recorded investment in loans by segment:
(1)
Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,822,500 $172,514 $2,995,014
Individually impaired loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,062 3,074 143,136
Collectively reserved loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,677,640 169,332 2,846,972
Acquired credit impaired loans . . . . . . . . . . . . . . . . . . . . . . . . . 4,798 108 4,906
(1)
Consists of unpaid principal balance, net of unamortized premiums and discounts, other cost basis and fair value
adjustments and accrued interest receivable on HFI loans, excluding loans for which we have elected the fair value
option.
On December 31, 2010, we entered into an agreement with Bank of America, N.A., and its affiliates, BAC
Home Loans Servicing, LP, and Countrywide Home Loans, Inc., to address outstanding repurchase requests
for residential mortgage loans with an unpaid principal balance of $3.9 billion delivered to us by affiliates of
Countrywide Financial Corporation. Bank of America agreed, among other things, to a resolution amount of
$1.5 billion, consisting of a cash payment of $1.3 billion and other payments recently made or to be made by
them. We recognized $930 million as a recovery of charge-offs resulting in a reduction to “Provision for loan
losses” and “Allowance for loan losses,” $266 million as a reduction to “Foreclosed property expense” and
$142 million as receipt of amounts receivable due to the rescission of mortgage insurance coverage included
in “Other Assets.”
The agreement substantially resolves or addresses outstanding repurchase requests on loans sold to us by
Countrywide and permits us to bring claims for any additional breaches of our representations and warranties
that are identified with respect to those loans. We continue to work with Bank of America to resolve
repurchase requests that remain outstanding, including requests relating to loans delivered to us by Bank of
America, N.A.
Our allowance for loan losses includes an estimate for the benefit of payments from lenders and servicers to
make us whole for losses on loans due to a breach of selling or servicing representations and warranties.
F-57
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)