Fannie Mae 2011 Annual Report Download - page 293

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 resolved or addressed then 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 some of 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. For additional information regarding outstanding repurchase requests, refer to “Note 17,
Concentrations of Credit Risk.”
The year ended December 31, 2010 includes an out-of-period adjustment of $1.1 billion to our consolidated
statement of operations and comprehensive loss reflecting our assessment of the collectibility of receivables from
our borrowers. We identified that for a portion of our delinquent loans we had not estimated and recorded our
obligation to reimburse servicers for advances they made on our behalf for preforeclosure property taxes and
insurance. We also did not record a receivable from borrowers for these payments or assess the collectibility of
that receivable.
Reserve for Guaranty Losses
The following table displays changes in the reserve for guaranty losses for the years ended December 31, 2011,
2010, and 2009.
For the Year Ended December 31,
2011 2010 2009
(Dollars in millions)
Reserve for guaranty losses:
Beginning balance, January 1 ............................................. $323 $54,430 $ 21,830
Adoption of consolidation accounting guidance ............................... — (54,103) —
Provision for guaranty losses .............................................. 804 194 63,057
Charge-offs(1)(2) ......................................................... (138) (203) (31,142)
Recoveries ............................................................ 5 5 685
Ending balance, December 31 ............................................. $994 $ 323 $54,430
(1) Includes charges of $228 million for the year ended December 31, 2009 related to unsecured HomeSaver Advance loans.
There were no charges related to unsecured HomeSaver Advance loans for the years ended December 31, 2011 and 2010,
respectively.
(2) Includes charges recorded at the date of acquisition of $116 million, $180 million and $20.3 billion for the years ended
December 31, 2011, 2010 and 2009, respectively, for acquired credit-impaired loans where the acquisition cost exceeded
the fair value of the acquired loan.
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