Fannie Mae 2013 Annual Report Download - page 144

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conditions and implement proactive portfolio management and monitoring which are each designed to keep credit losses to a
low level relative to our multifamily guaranty book of business.
Multifamily Problem Loan Statistics
We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. We include the unpaid
principal balance of multifamily loans that we own or that back Fannie Mae MBS and any housing bonds for which we
provide credit enhancement in the calculation of the multifamily serious delinquency rate.
Table 53 displays a comparison of our multifamily serious delinquency rates for loans acquired through our DUS program
versus loans not acquired through our DUS program.
Table 53: Multifamily Concentration Analysis
As of December 31,
Percentage of Multifamily Credit
Losses For the Years Ended
December 31,
2013 2012 2011
Percentage
of Book
Outstanding
Serious
Delinquency
Rate
Percentage
of Book
Outstanding
Serious
Delinquency
Rate
Percentage
of Book
Outstanding
Serious
Delinquency
Rate 2013(1) 2012 2011
DUS small balance
loans (2) . . . . . . . . . . . 8%0.24 %8%0.32 %8%0.45 %5%7%9%
DUS non small balance
loans (3) . . . . . . . . . . . 82 0.06 76 0.17 72 0.51 (26) 71 72
Non-DUS small balance
loans (2) . . . . . . . . . . . 5 0.50 7 1.02 9 1.38 43 16 12
Non-DUS non small
balance loans (3) . . . . . 5 0.17 9 0.21 11 0.57 78 6 7
Total multifamily
loans . . . . . . . . . . 100 %0.10 %100 %0.24 %100 %0.59 %100 %100 %100 %
__________
(1) The percentage of credit losses may be negative as a result of recoveries on previously charged off amounts.
(2) Loans with original unpaid principal balances of up to $3 million as well as loans in high cost markets with original unpaid principal
balances up to $5 million.
(3) Loans with original unpaid principal balances greater than $3 million as well as loans in high cost markets with original unpaid principal
balances greater than $5 million.
The multifamily serious delinquency rate decreased as of December 31, 2013 compared with December 31, 2012 as national
multifamily market fundamentals continued to improve. The DUS loans in our guaranty book of business have lower
delinquency rates when compared with the non-DUS loans in our guaranty book primarily due to the DUS model, which has
several features that more closely align our interests with those of the lenders. Multifamily loans with an original balance of
up to $3 million nationwide or $5 million in high cost markets, which we refer to as small balance loans, not acquired
through our DUS program, continue to represent a larger share of delinquencies, but they are generally covered by loss
sharing arrangements that limit the credit losses we incur.
REO Management
Foreclosure and REO activity affect the level of our credit losses. Table 54 displays our held for sale multifamily REO
activity for the periods indicated.
Table 54: Multifamily Foreclosed Properties
For the Year Ended December 31,
2013 2012 2011
Multifamily foreclosed properties held for sale (number of properties):
Beginning of period inventory of multifamily foreclosed properties (REO) . . . . . . . . . . . . . . . . 128 260 222
Total properties acquired through foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 164 257
Transfers to (from) held for sale(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 (44)(27)
Dispositions of REO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (158)(252)(192)
End of period inventory of multifamily foreclosed properties (REO). . . . . . . . . . . . . . . . . . . . . 118 128 260
Carrying value of multifamily foreclosed properties (dollars in millions) . . . . . . . . . . . . . . . . . $ 632 $ 331 $ 577