Fannie Mae 2014 Annual Report Download - page 131

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Problem Loan Statistics
Table 38 displays the delinquency status of loans in our single-family conventional guaranty book of business (based on
number of loans) and changes in the balance of seriously delinquent loans in our single-family conventional guaranty book of
business.
Table 38: Delinquency Status and Activity of Single-Family Conventional Loans
As of December 31,
2014 2013 2012
Delinquency status:
30 to 59 days delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.47% 1.64% 1.96%
60 to 89 days delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.43 0.49 0.66
Seriously delinquent (“SDQ”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.89 2.38 3.29
Percentage of SDQ loans that have been delinquent for more than 180 days .70% 73% 72%
Percentage of SDQ loans that have been delinquent for more than two years.34 36 30
For the Year Ended December 31,
2014 2013 2012
Single-family SDQ loans (number of loans):
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418,837 576,591 690,911
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306,464 378,027 512,618
Removals:
Modifications and other loan workouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (118,860)(157,336)(165,489)
Liquidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (151,586)(226,976)(279,838)
Cured or less than 90 days delinquent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (125,265)(151,469)(181,611)
Total removals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (395,711)(535,781)(626,938)
Ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329,590 418,837 576,591
Our single-family serious delinquency rate has decreased each quarter since the first quarter of 2010. The decrease in our
serious delinquency rate is primarily the result of home retention solutions, foreclosure alternatives and completed
foreclosures, improved loan payment performance, as well as our acquisition of loans with stronger credit profiles since the
beginning of 2009. Loans we acquired since 2009 comprised 81% of our single-family guaranty book of business and had a
serious delinquency rate of 0.36% as of December 31, 2014.
Although our single-family serious delinquency rate has decreased, the pace of declines in our single-family serious
delinquency rate has slowed in recent months and we expect this trend to continue. Our single-family serious delinquency
rate and the period of time that loans remain seriously delinquent continue to be negatively impacted by the length of time
required to complete a foreclosure in some states. High levels of foreclosures, changes in state foreclosure laws, new federal
and state servicing requirements imposed by regulatory actions and legal settlements, and the need for servicers to adapt to
these changes have lengthened the time it takes to foreclose on a mortgage loan in a number of states, particularly in New
York, Florida and New Jersey. Longer foreclosure timelines result in these loans remaining in our book of business for a
longer time, which has caused our serious delinquency rate to decrease more slowly in the last few years than it would have if
the pace of foreclosures had been faster. We believe the slow pace of foreclosures in certain areas of the country will continue
to negatively affect our single-family serious delinquency rates, foreclosure timelines and credit-related income (expense).
Other factors such as the pace of loan modifications, changes in home prices, unemployment levels and other macroeconomic
conditions also influence serious delinquency rates. We expect the number of our single-family loans in our book of business
that are seriously delinquent to remain above pre-2008 levels for years.
Certain higher-risk loan categories, such as Alt-A loans and loans with higher mark-to-market LTV ratios, and our 2005
through 2008 loan vintages continue to exhibit higher than average delinquency rates and/or account for a higher share of our
credit losses. Our 2005 to 2008 loan vintages represented approximately 51% of the loans added to our seriously delinquent
loan population in 2014. In addition, loans in certain states such as Florida, Illinois, New Jersey and New York have exhibited
higher than average delinquency rates and/or account for a higher share of our credit losses.