Freddie Mac 2004 Annual Report Download - page 197

Table 6.2 Ì Impaired Loans(1)
December 31,
2004 2003 2002
Recorded SpeciÑc Net Recorded SpeciÑc Net Recorded SpeciÑc Net
Investment(2) Reserve Investment Investment(2) Reserve Investment Investment(2) Reserve Investment
(dollars in millions)
Impaired loans having:
Related-valuation allowance ÏÏÏÏÏÏÏÏÏÏ $ 46 $(3) $ 43 $ 60 $(10) $ 50 $ 169 $(25) $ 144
No related-valuation allowance(3)ÏÏÏÏÏÏ 2,261 Ì 2,261 2,309 Ì 2,309 2,077 Ì 2,077
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,307 $(3) $2,304 $2,369 $(10) $2,359 $2,246 $(25) $2,221
(1) Single-family impaired loans include performing and non-performing TDRs. Multifamily impaired loans are deÑned as performing
and non-performing TDR loans, loans 60 days or more delinquent except for certain credit enhanced loans and certain mortgage
loans with real estate collateral values less than the outstanding unpaid principal balances. For more details on multifamily impaired
loans, see ""NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.''
(2) Recorded Investment includes the unpaid principal balance of mortgage loans plus other amortized basis adjustments, which are
modiÑcations to their carrying value.
(3) Impaired loans with no related valuation allowance primarily represent performing single-family TDR loans.
For the years ended December 31, 2004, 2003 and 2002, the average recorded investment in impaired
loans was $2,310 million, $2,330 million and $2,029 million, respectively.
Interest income on multifamily impaired loans is recognized on an accrual basis for loans performing
under the original or restructured terms and on a cash basis for non-performing loans, which collectively
totaled approximately $13 million, $16 million and $22 million for the years ended December 31, 2004, 2003
and 2002, respectively. For single-family performing and non-performing loans, Freddie Mac recognizes
interest income on an accrual basis and establishes reserves for estimated accrued, but uncollectible, interest
for these loans as of the consolidated balance sheet dates. Gross interest income on impaired single-family
loans totaled $157 million, $160 million and $129 million for the years ended December 31, 2004, 2003 and
2002, respectively.
Delinquency Rates
Table 6.3 summarizes the delinquency rates for Freddie Mac's Total mortgage portfolio, excluding
non-Freddie Mac mortgage-related securities and that portion of Structured Securities that is backed by
Ginnie Mae CertiÑcates at December 31, 2004, 2003 and 2002.
Table 6.3 Ì Delinquency Performance(1)
December 31,
2004 2003 2002
Delinquencies, end of period
Single-family:(2)
Credit-enhanced portfolio(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.75% 2.96% 2.07%
Non-credit-enhanced portfolio ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.24% 0.27% 0.28%
Total portfolioÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.73% 0.86% 0.77%
Multifamily(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.06% 0.05% 0.13%
(1) Based on the Total mortgage portfolio, excluding both non-Freddie Mac mortgage-related securities and that portion of Structured
Securities that is backed by Ginnie Mae CertiÑcates.
(2) Based on the number of mortgages 90 days or more delinquent or in foreclosure.
(3) Includes alternative collateral deals.
(4) Based on net carrying value of mortgages 60 days or more delinquent or in foreclosure.
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