Fannie Mae 2011 Annual Report Download - page 24

single-family mortgage assets, such as long-term standby commitments. It excludes non-Fannie Mae mortgage-related
securities held in our mortgage portfolio for which we do not provide a guaranty.
(2) Calculated based on the number of single-family conventional loans that are three or more months past due and loans that
have been referred to foreclosure but not yet foreclosed upon, divided by the number of loans in our single-family
conventional guaranty book of business. We include all of the single-family conventional loans that we own and those
that back Fannie Mae MBS in the calculation of the single-family serious delinquency rate.
(3) Represents the total amount of nonperforming loans including troubled debt restructurings and HomeSaver Advance
(“HSA”) first-lien loans. A troubled debt restructuring is a restructuring of a mortgage loan in which a concession is
granted to a borrower experiencing financial difficulty. HSA first-lien loans are unsecured personal loans in the amount of
past due payments used to bring mortgage loans current. We generally classify loans as nonperforming when the payment
of principal or interest on the loan is two months or more past due. In December 2011, we changed our definition of “total
nonperforming loans.” Under our new definition, we no longer reflect in this amount (1) our allowance for loan losses or
(2) our allowance for accrued interest receivable related to these individually impaired loans. The amounts we report for
prior periods have been revised from amounts we previously disclosed as a result of this change.
(4) Consists of the allowance for loan losses for loans recognized in our consolidated balance sheets and the reserve for
guaranty losses related to both single-family loans backing Fannie Mae MBS that we do not consolidate in our
consolidated balance sheets and single-family loans that we have guaranteed under long-term standby commitments. For
additional information on the change in our loss reserves see “Consolidated Results of Operations—Credit-Related
Expenses—Provision for Credit Losses.”
(5) Consists of (a) the combined loss reserves, (b) allowance for accrued interest receivable, and (c) allowance for
preforeclosure property taxes and insurance receivables.
(6) Includes acquisitions through deeds-in-lieu of foreclosure.
(7) Consists of the provision for loan losses, the provision (benefit) for guaranty losses and foreclosed property expense
(income).
(8) Consists of (a) charge-offs, net of recoveries and (b) foreclosed property expense; adjusted to exclude the impact of fair
value losses resulting from credit-impaired loans acquired from MBS trusts.
(9) Consists of (a) modifications, which do not include trial modifications or repayment plans or forbearances that have been
initiated but not completed; (b) repayment plans and forbearances completed and (c) HomeSaver Advance first-lien loans.
See “Table 46: Statistics on Single-Family Loan Workouts” in “Risk Management—Credit Risk Management” for
additional information on our various types of loan workouts.
(10) Calculated based on annualized problem loan workouts during the period as a percentage of delinquent loans in our
single-family guaranty book of business as of the end of the period.
Our single-family serious delinquency rate has decreased each quarter since the first quarter of 2010. The
decrease in our serious delinquency rate is the result of home retention solutions, as well as foreclosure
alternatives and completed foreclosures. The decrease is also attributable to our acquisition of loans with stronger
credit profiles since the beginning of 2009, as these loans are now more than 50% of our single-family guaranty
book of business, resulting in a smaller percentage of our loans becoming seriously delinquent.
Although our single-family serious delinquency rate has decreased significantly since the first quarter of 2010,
our serious delinquency rate and the period of time that loans remain seriously delinquent has been negatively
affected in recent periods by the increase in the average number of days it is taking to complete a foreclosure. As
described in “Reducing Credit Losses on Our Legacy Book of Business—Managing Timelines for Workouts and
Foreclosures,” high levels of foreclosures, continuing issues in the servicer foreclosure process and new
legislative, regulatory and judicial requirements have lengthened the time it takes to foreclose on a mortgage loan
in many states. We expect serious delinquency rates will continue to be affected in the future by home price
changes, changes in other macroeconomic conditions, the length of the foreclosure process, the volume of loan
modifications, and the extent to which borrowers with modified loans continue to make timely payments.
We provide additional information on our credit-related expenses in “Consolidated Results of Operations—
Credit-Related Expenses” and on the credit performance of mortgage loans in our single-family book of business
and our loan workouts in “Risk Management—Credit Risk Management—Single-Family Mortgage Credit Risk
Management.”
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