Fannie Mae 2013 Annual Report Download - page 87

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The improvement in our credit results in 2012 was partially offset by a $3.5 billion increase in our provision for credit losses
due to changes in our assumptions and data used in calculating our loss reserves and a $1.1 billion increase in our provision
for credit losses due to a change in our accounting for loans to certain borrowers who have received bankruptcy relief, which
led to an increase in the number of loans we classify as TDRs.
We discuss our expectations regarding our future loss reserves in “Executive Summary—Outlook—Loss Reserves.”
Loss Reserves Concentration Analysis
Certain loan categories have contributed disproportionately to our single-family loss reserves, including loans related to
higher-risk product types, such as Alt-A loans, and loans originated in 2005 through 2008. Our Alt-A loans accounted for
approximately 26% of our total single-family loss reserves as of December 31, 2013, compared with approximately 27% as
of December 31, 2012. Our 2005 to 2008 loan vintages accounted for approximately 84% of our total single-family loss
reserves as of December 31, 2013, compared with approximately 85% as of December 31, 2012. See “Note 6, Financial
Guarantees” for additional information regarding our Alt-A loans and 2005 to 2008 loan vintages as a percentage of our
single-family conventional guaranty book of business.
Troubled Debt Restructurings and Nonaccrual Loans
Table 14 displays the composition of loans restructured in a TDR that are on accrual status, loans on nonaccrual status and
off-balance sheet loans in unconsolidated Fannie Mae MBS trusts which would meet our criteria for nonaccrual status if the
loans had been on-balance sheet. The table includes held-for-investment and held-for-sale mortgage loans. For information on
the impact of TDRs and other individually impaired loans on our allowance for loan losses, see “Note 3, Mortgage Loans.”
For activity related to our single-family TDRs, see Table 46 in “MD&A—Risk Management—Credit Risk Management—
Single-Family Mortgage Credit Risk Management.”
Table 14: Troubled Debt Restructurings and Nonaccrual Loans
As of December 31,
2013 2012 2011 2010 2009
(Dollars in millions)
TDRs on accrual status(1)
Single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140,512 $ 135,196 $ 107,991 $ 81,767 $ 9,880
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 868 806 935 —
Total TDRs on accrual status. . . . . . . . . . . . . . . . . . . . . . . . . $141,227 $136,064 $108,797 $ 82,702 $ 9,880
Nonaccrual loans
Single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,355 $ 112,555 $ 140,234 $ 169,775 $ 36,764
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,209 2,206 2,764 1,013 832
Total nonaccrual loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,564 $114,761 $142,998 $170,788 $ 37,596
Other(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42 $ 72 $ 154 $ 89 $174,588
Accruing on-balance sheet loans past due 90 days or more(3). . . . $ 719 $ 3,580 $ 768 $ 896 $ 612
For the Year Ended December 31,
2013 2012 2011 2010 2009
(Dollars in millions)
Interest related to on-balance sheet TDRs and nonaccrual loans:
Interest income forgone(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,805 $7,554 $8,224 $8,185 $1,341
Interest income recognized for the period(5) . . . . . . . . . . . . . . . . . . 5,915 6,442 6,598 7,995 1,206
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(1) Includes loans to certain borrowers who have received bankruptcy relief and therefore are classified as TDRs and HomeSaver Advance
first-lien loans on accrual status.
(2) Consists of off-balance sheet loans in unconsolidated Fannie Mae MBS trusts that would meet our criteria for nonaccrual status if the
loans had been on-balance sheet.
(3) Recorded investment in loans that, as of the end of each period, are 90 days or more past due and continuing to accrue interest. As of
December 31, 2012, includes loans with a recorded investment of $2.8 billion which were repurchased in January 2013 pursuant to our
resolution agreement with Bank of America. These loans were returned to accrual status to reflect the change in our assessment of