Fannie Mae 2013 Annual Report Download - page 257

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-33
with troubled borrowers, which include repayment plans and forbearance arrangements, both of which represent informal
agreements with the borrower that do not result in the legal modification of the loan’s contractual terms. We account for these
informal restructurings as a TDR if we defer more than three missed payments. We also classify as TDRs loans to certain
borrowers who have received bankruptcy relief.
The substantial majority of the loan modifications we complete result in term extensions, interest rate reductions or a
combination of both. During the years ended December 31, 2013 and 2012, the average term extension of a single-family
modified loan was 154 and 131 months, respectively, and the average interest rate reduction was 1.68 and 2.15 percentage
points, respectively.
The following table displays the number of loans and recorded investment in loans restructured in a TDR for the years ended
December 31, 2013 and 2012.
For the Year Ended December 31,
2013 2012
Number of
Loans Recorded
Investment(1) Number of Loans Recorded
Investment(1)
(Dollars in millions)
Single-family:
Primary (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,998 $ 19,016 270,913 $ 39,527
Government (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 35 394 50
Alt-A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,471 3,794 50,572 9,116
Other (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,226 1,378 15,484 3,489
Total single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,007 24,223 337,363 52,182
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 213 46 324
Total troubled debt restructurings . . . . . . . . . . . . . . . . . . . . . . . . . 155,040 $ 24,436 337,409 $ 52,506
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(1) Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and
accrued interest receivable. Based on the nature of our modification programs, which do not include principal or past-due interest
forgiveness, there is not a material difference between the recorded investment in our loans pre- and post- modification, therefore
amounts represent recorded investment post-modification.
(2) Consists of mortgage loans that are not included in other loan classes.
(3) Consists of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A.
(4) Includes loans with higher-risk characteristics, such as interest-only loans and negative-amortizing loans, that are neither government
nor Alt-A.
The following table displays the number of loans and recorded investment in loans that had a payment default for the years
ended December 31, 2013 and 2012 and were restructured in a TDR in the twelve months prior to the payment default. For
purposes of this disclosure, we define loans that had a payment default as: single-family and multifamily loans with
completed TDRs that liquidated during the period, either through foreclosure, deed-in-lieu of foreclosure or a short sale;
single-family loans with completed modifications that are two or more months delinquent during the period; or multifamily
loans with completed modifications that are one or more months delinquent during the period.