Fannie Mae 2010 Annual Report Download - page 98

impaired loan. We exclude these fair value losses from our credit loss calculation as described in “Credit Loss
Performance Metrics.”
Table 11: Total Loss Reserves
2010 2009
As of December 31,
(Dollars in millions)
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $61,556 $ 9,925
Reserve for guaranty losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 54,430
Combined loss reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,879 64,355
Allowance for accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,414 536
Allowance for preforeclosure property taxes and insurance receivable
(1)
..................... 958 —
Total loss reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,251 64,891
Fair value losses previously recognized on acquired credit impaired loans
(2)
. . . . . . . . . . . . . . . . . . 19,171 22,295
Total loss reserves and fair value losses previously recognized on acquired credit impaired loans . . $85,422 $87,186
(1)
Amount included in “Other assets” in our consolidated balance sheets.
(2)
Represents the fair value losses on loans purchased out of MBS trusts reflected in our consolidated balance sheets.
We summarize the changes in our combined loss reserves in Table 12. Upon recognition of the mortgage loans
held by newly consolidated trusts on January 1, 2010, we increased our “Allowance for loan losses” and
decreased our “Reserve for guaranty losses.” The impact at transition is reported as “Adoption of new
accounting standards” in Table 12. The decrease in the combined loss reserves from transition represents a
difference in the methodology used to estimate incurred losses for our allowance for loan losses as compared
with our reserve for guaranty losses and our separate presentation of the portion of the allowance related to
accrued interest as our “Allowance for accrued interest receivable.” These changes are discussed in “Note 2,
Adoption of the New Accounting Standards on the Transfers of Financial Assets and Consolidation of Variable
Interest Entities.”
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