Fannie Mae 2011 Annual Report Download - page 173

Table 49: Single-Family Foreclosed Properties
For the Year Ended December 31,
2011 2010 2009
Single-family foreclosed properties (number of properties):
Beginning of period inventory of single-family foreclosed properties (REO)(1) ..... 162,489 86,155 63,538
Acquisitions by geographic area:(2)
Midwest ........................................................ 45,167 57,761 36,072
Northeast ....................................................... 9,858 14,049 7,934
Southeast ....................................................... 51,153 79,453 39,302
Southwest ....................................................... 44,675 55,276 31,197
West ........................................................... 48,843 55,539 31,112
Total properties acquired through foreclosure(1) ............................ 199,696 262,078 145,617
Dispositions of REO ................................................. (243,657) (185,744) (123,000)
End of period inventory of single-family foreclosed properties (REO)(1) .......... 118,528 162,489 86,155
Carrying value of single-family foreclosed properties (dollars in millions)(3) ....... $ 9,692 $ 14,955 $ 8,466
Single-family foreclosure rate(4) .......................................... 1.13% 1.46% 0.80%
(1) Includes acquisitions through deeds-in-lieu of foreclosure.
(2) See footnote 9 to “Table 41: Risk Characteristics of Single-Family Conventional Business Volume and Guaranty Book of
Business” for states included in each geographic region.
(3) Excludes foreclosed property claims receivables, which are reported in our consolidated balance sheets as a component of
“Acquired property, net.”
(4) Estimated based on the total number of properties acquired through foreclosure or deeds-in-lieu of foreclosure as a
percentage of the total number of loans in our single-family guaranty book of business as of the end of each respective
period.
The ongoing weak economy, as well as high unemployment rates, continues to result in a high level of mortgage
loans that transition from delinquent to REO status, either through foreclosure or deed-in-lieu of foreclosure. Our
foreclosure rates remain high; however, foreclosure levels were lower than they would have been during 2011
due to delays in the processing of foreclosures caused by continuing foreclosure process issues encountered by
our servicers and new legislative, regulatory and judicial requirements. Additionally, foreclosure levels were
affected by our directive to servicers to delay foreclosure sales until the loan servicer verifies that the borrower is
ineligible for a HAMP modification and that all other home retention and foreclosure prevention alternatives
have been exhausted. The delay in potential foreclosures, as well as an increase in the number of dispositions of
REO properties, has resulted in a decrease in the inventory of foreclosed properties since December 31, 2010.
The percentage of our single-family foreclosed properties that we determined we were unable to market for sale
was 47% as of December 31, 2011 compared with 41% as of December 31, 2010. The two largest concentrations
of our unable-to-market-for-sale inventory are: (1) properties that are still occupied by the person or personal
property, and for which the eviction process is not yet complete (“occupied status”); and (2) properties that are
within the period during which state law allows the former mortgagor and second lien holders to redeem the
property (“redemption status”). Being in occupied status lengthens the time a property remains in our REO
inventory by an average of one to three months; occupied status properties represented approximately 31% of our
unable to market for sale inventory as of December 31, 2011 compared with approximately 40% as of
December 31, 2010. Being in redemption status lengthens the time a property remains in our REO inventory by
an average of two to six months; redemption status properties represented approximately 26% of our unable to
market for sale inventory as of December 31, 2011 compared with approximately 27% as of December 31, 2010.
As we are unable to market a higher portion of our inventory, it slows the pace at which we can dispose of our
properties and increases our foreclosed property expense related to costs associated with ensuring that the
property is vacant and maintaining the property.
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