Fannie Mae 2014 Annual Report Download - page 279

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-64
As of December 31,
2014(1)(2) 2013(1)(2)
30 Days
Delinquent Seriously Delinquent(3) 30 Days Delinquent Seriously Delinquent(3)
Percentage of multifamily guaranty book of business . . . . . . . . . . . . 0.04% 0.05% 0.03% 0.10%
As of December 31,
2014(1) 2013(1)
Percentage of
Multifamily
Guaranty Book
of Business(2)
Percentage
Seriously
Delinquent(3)(4)
Percentage of
Multifamily
Guaranty Book
of Business(2)
Percentage
Seriously
Delinquent(3)(4)
Original LTV ratio:
Greater than 80% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3% 0.31% 3% 0.23%
Less than or equal to 80% . . . . . . . . . . . . . . . . . . . . . . . . 97 0.04 97 0.10
Current debt service coverage ratio less than 1.0(5) . . . . . . . . 3 0.83 4 1.09
__________
(1) Consists of the portion of our multifamily guaranty book of business for which we have detailed loan level information, which
constituted approximately 99% of our total multifamily guaranty book of business as of December 31, 2014 and 2013 excluding loans
that have been defeased.
(2) Calculated based on the aggregate unpaid principal balance of multifamily loans for each category divided by the aggregate unpaid
principal balance of loans in our multifamily guaranty book of business.
(3) Consists of multifamily loans that were 60 days or more past due as of the dates indicated.
(4) Calculated based on the unpaid principal balance of multifamily loans that were seriously delinquent divided by the aggregate unpaid
principal balance of multifamily loans for each category included in our guaranty book of business.
(5) Our estimates of current DSCRs are based on the latest available income information for these properties. Although we use the most
recently available results of our multifamily borrowers, there is a lag in reporting, which typically can range from 3 to 6 months, but in
some cases may be longer.
Alt-A Loans and Securities
We own and guarantee Alt-A mortgage loans and mortgage-related securities. An Alt-A mortgage loan generally refers to a
mortgage loan that has been underwritten with reduced or alternative documentation than that required for a full
documentation mortgage loan but may also include other alternative product features. As a result, Alt-A mortgage loans
generally have a higher risk of default than non-Alt-A mortgage loans. In reporting our Alt-A exposure, we have classified
mortgage loans as Alt-A if and only if the lenders that deliver the mortgage loans to us have classified the loans as Alt-A,
based on documentation or other product features. We have classified private-label mortgage-related securities held in our
investment portfolio as Alt-A if the securities were labeled as such when issued.
We apply our classification criteria in order to discuss our exposure to Alt-A loans. However, there is no universally accepted
definition of Alt-A loans. Our single-family conventional guaranty book of business includes loans with some features that
are similar to Alt-A loans that we have not classified as Alt-A because they do not meet our classification criteria. We reduce
our risk associated with some of these loans through credit enhancements, as described below under “Mortgage Insurers.” We
do not rely solely on our classifications of loans as Alt-A to evaluate the credit risk exposure relating to these loans in our
single-family conventional guaranty book of business. For more information about the credit risk characteristics of loans in
our single-family guaranty book of business, see “Note 3, Mortgage Loans.”
The Alt-A mortgage loans and Fannie Mae MBS backed by Alt-A loans of $117.6 billion in unpaid principal balance
represented 4% of our single-family mortgage credit book of business as of December 31, 2014, compared with $132.5
billion in unpaid principal balance which represented 5% of our single-family mortgage credit book of business as of
December 31, 2013.
Other Concentrations
Mortgage Sellers and Servicers. Mortgage servicers collect mortgage and escrow payments from borrowers, pay taxes and
insurance costs from escrow accounts, monitor and report delinquencies, and perform other required activities on our behalf.
Our mortgage sellers and servicers are also obligated to repurchase loans or foreclosed properties, reimburse us for losses or