Fannie Mae 2013 Annual Report Download - page 13

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(9) Consists of (a) charge-offs, net of recoveries and (b) foreclosed property (income) expense, adjusted to exclude the impact of fair value
losses resulting from credit-impaired loans acquired from MBS trusts.
(10) Calculated as the amount of sale proceeds received on disposition of REO properties during the respective periods, excluding those
subject to repurchase requests made to our seller or servicers, divided by the aggregate unpaid principal balance of the related loans at
the time of foreclosure. Net sales price represents the contract sales price less selling costs for the property and other charges paid by
the seller at closing.
(11) Calculated as the amount of sale proceeds received on properties sold in short sale transactions during the respective period divided by
the aggregate unpaid principal balance of the related loans. Net sales price represents the contract sales price less the selling costs for
the property and other charges paid by the seller at the closing, including borrower relocation incentive payments and subordinate
lien(s) negotiated payoffs.
(12) Consists of (a) modifications, which do not include trial modifications, loans to certain borrowers who have received bankruptcy relief
that are classified as TDRs, or repayment plans or forbearances that have been initiated but not completed and (b) repayment plans and
forbearances completed. See “Table 45: Statistics on Single-Family Loan Workouts” in “Risk Management—Credit Risk Management
—Single-Family Mortgage Credit Risk Management—Problem Loan Management—Loan Workout Metrics” for additional information
on our various types of loan workouts.
(13) Calculated based on 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.
We provide additional information on our credit-related expense or income in “Consolidated Results of Operations—Credit-
Related (Income) Expense” and on the credit performance of mortgage loans in our single-family book of business in “Risk
Management—Credit Risk Management—Single-Family Mortgage Credit Risk Management.”
We provide more information on our efforts to reduce our credit losses in “MD&A—Risk Management—Credit Risk
Management—Single-Family Mortgage Credit Risk Management” and “MD&A—Risk Management—Institutional
Counterparty Credit Risk Management.” See also “Risk Factors,” where we describe factors that may adversely affect the
success of our efforts, including our reliance on third parties to service our loans, conditions in the foreclosure environment,
and risks relating to our mortgage insurer counterparties.
Contributions to the Housing and Mortgage Markets
Liquidity and Support Activities
As the largest provider of residential mortgage credit in the United States, we indirectly enable families to buy, refinance or
rent homes. During 2013, we continued to provide critical liquidity and support to the U.S. mortgage market in a number of
important ways:
• We serve as a stable source of liquidity for purchases of homes and financing of multifamily rental housing, as well
as for refinancing existing mortgages. The approximately $797 billion in liquidity we provided to the mortgage
market in 2013 through our purchases and guarantees of loans and securities enabled borrowers to complete 2.6
million mortgage refinancings and 1.0 million home purchases, and provided financing for approximately 507,000
units of multifamily housing.
• Our role in the market enables borrowers to have reliable access to affordable mortgage credit, including a variety of
conforming mortgage products such as the prepayable 30-year fixed-rate mortgage that protects homeowners from
fluctuations in interest rates.
• We provided approximately 234,000 loan workouts in 2013 to help homeowners stay in their homes or otherwise
avoid foreclosure. These efforts helped to stabilize neighborhoods, home prices and the housing market.
• We helped borrowers refinance loans, including through our Refi Plus initiative. We acquired approximately 1
million Refi Plus loans in 2013. Refinancings delivered to us through Refi Plus in the fourth quarter of 2013 reduced
borrowers’ monthly mortgage payments by an average of $166. Some borrowers’ monthly payments increased as
they took advantage of the ability to refinance through Refi Plus to reduce the term of their loan, to switch from an
adjustable-rate mortgage to a fixed-rate mortgage or to switch from an interest-only mortgage to a fully amortizing
mortgage.
• We support affordability in the multifamily rental market. Over 85% of the multifamily units we financed in 2013
were affordable to families earning at or below the median income in their area.
• In addition to purchasing and guaranteeing loans, we provide funds to the mortgage market through short-term
financing and other activities. These activities are described in more detail in “Business Segments—Capital
Markets.”