Fannie Mae 2013 Annual Report Download - page 148

143
Table 55: Repurchase Request Activity
For the Year Ended December 31,
2013 2012
(Dollars in millions)
Beginning outstanding repurchase requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,013 $ 10,400
Issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,478 23,764
Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,930)(1) (8,657)
Other resolutions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,301)(1) (8,425)
Total successfully resolved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,231)(17,082)
Cancellations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (761)(1,069)
Ending outstanding repurchase requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,499 $ 16,013
__________
(1) Includes the impact of our January 6, 2013 resolution agreement with Bank of America, which addressed $11.3 billion of the total
outstanding repurchase request balance as of December 31, 2012. Includes the impact of our June 28, 2013 resolution agreement with
CitiMortgage, which addressed $739 million of the total outstanding repurchase request balance that was outstanding before the
resolution agreement. Includes the impact of our December 23, 2013 resolution agreement with Wells Fargo, which addressed $1.6
billion of the total outstanding repurchase request balance that was outstanding before the resolution agreement.
(2) Primarily includes repurchase requests that were successfully resolved through negotiated settlements and the lender taking corrective
action with or without a pricing adjustment. Also includes resolutions that were included in bulk indemnification and/or repurchase
agreements with a mortgage seller or servicer.
The increase in “Total successfully resolved” activity during 2013 compared with 2012 was primarily due to the execution of
resolution agreements with some of our largest counterparties, including Bank of America, N.A., CitiMortgage, Inc.,
JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. This reflects our continued effort in pursuing reimbursement for
loss and other remedies on breaches of selling representations and warranties on delivered loans.
As of December 31, 2013, less than 0.25% of the loans in our new single-family book of business that were acquired between
2009 and 2012, had been subject to a repurchase request, compared with approximately 3.7% of the single-family loans
acquired between 2005 and 2008.
We continue to actively pursue our contractual rights associated with outstanding repurchase requests. Failure by a mortgage
seller or servicer to repurchase a loan or to otherwise make us whole for our losses may result in the imposition of certain
sanctions including, but not limited to:
• requiring the posting of collateral,
• denying transfer of servicing requests or denying pledged servicing requests,
• modifying or suspending any contract or agreement with a lender, or
• suspending or terminating a lender or imposing some other formal sanction on a lender.
If we are unable to resolve these matters to our satisfaction, we may seek additional remedies. If we are unable to resolve our
repurchase requests, either through collection or additional remedies, we will not recover the losses we have recognized on
the associated loans.
As described in “Mortgage Credit Risk Management—Single-Family Mortgage Credit Risk Management,” we implemented
a new representation and warranty framework on January 1, 2013. With the implementation of these changes, we will review
a larger sample of loans near the time of acquisition for compliance with our underwriting and eligibility requirements. As a
result, a greater proportion of our repurchase requests in the future may be issued on performing loans, as compared with our
currently outstanding repurchase requests, the substantial majority of which relate to loans that are either nonaccrual or have
been foreclosed upon.
Mortgage Insurers
We are generally required, pursuant to our charter, to obtain credit enhancements on single-family conventional mortgage
loans that we purchase or securitize with LTV ratios over 80% at the time of purchase. We use several types of credit
enhancements to manage our single-family mortgage credit risk, including primary and pool mortgage insurance coverage.
Table 56 displays our risk in force for the primary and pool mortgage insurance coverage on single-family loans in our
guaranty book of business and our insurance in force for our mortgage insurer counterparties as of December 31, 2013 and
2012. The table includes our top ten mortgage insurer counterparties, which provided over 99% of our total mortgage