Freddie Mac 2006 Annual Report Download - page 86

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Both our total credit-enhanced and total non-credit-enhanced delinquency rates improved in 2006. Many of the loans in
the Southwest and Southeast regions that were aÅected by Hurricane Katrina, and were delinquent at the end of 2005,
resumed payments following the forbearance period we oÅered and others were modiÑed from their original terms to help
borrowers avoid foreclosure. Excluding the loans aÅected by Hurricane Katrina, our total non-credit-enhanced delinquency
rate at December 31, 2006 was unchanged from December 31, 2005. However, the total non-credit-enhanced delinquency
rate for the North Central region rose in 2006, primarily due to a regional economic downturn.
In addition to the improvement attributable to loans aÅected by Hurricane Katrina, our total credit-enhanced
delinquency rate declined as the number of loans added to the portfolio increased. The delinquency rates on new loans are
generally lower than more seasoned loans and we expect that delinquency rates for these loans will increase as they age.
Our multifamily delinquency rate remained very low at 0.05 percent, zero percent and 0.06 percent at the end of 2006,
2005 and 2004, respectively. Hurricane Katrina has not aÅected our reported multifamily delinquency rate because the
contractual terms of certain aÅected mortgage loans, with unpaid principal balances totaling $149 million at December 31,
2006, were modiÑed.
Table 41 Ì Single-Family Mortgages By Year of Origination Ì Percentage of Mortgage Portfolio and Non-Credit-
Enhanced Delinquency Rates(1)
December 31,
2006 2005 2004
Percent of Non-Credit- Percent of Non-Credit- Percent of Non-Credit-
Single-Family Enhanced Single-Family Enhanced Single-Family Enhanced
Year of Origination UPB Balance Delinquency Rate UPB Balance Delinquency Rate UPB Balance Delinquency Rate
Pre-1999 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3% 0.57% 5% 0.70% 7% 0.61%
1999ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 0.67 1 0.89 2 0.78
2000ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ G1 1.83 G1 2.09 1 1.94
2001ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 0.60 4 0.75 6 0.59
2002ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 0.32 11 0.38 16 0.26
2003ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26 0.15 34 0.17 44 0.06
2004ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16 0.22 21 0.21 24 0.03
2005ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23 0.19 24 0.08 Ì Ì
2006ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19 0.09 Ì Ì Ì Ì
At December 31, 100% 0.25% 100% 0.30% 100% 0.24%
(1) Excludes Structured Transactions.
Our single-family portfolio was aÅected by heavy reÑnance volumes in recent years. At December 31, 2006,
approximately 58 percent of our single-family mortgage portfolio consisted of mortgage loans originated in 2006, 2005 or
2004. Mortgage loans originated in 2003 and earlier, which represent approximately 42 percent of our single-family mortgage
portfolio, have delinquency rates that are generally higher than the overall portfolio delinquency rate due to the natural
aging of the loans and, in some instances, the weaker credit quality of these loans. The Ñrst year delinquency rate associated
with new originations increased in each of the last three years due to a number of factors, including the expansion of credit
terms under which loans are underwritten and an increase in our purchases of variable-rate and non-traditional mortgage
products that have higher inherent credit risk than traditional Ñxed-rate mortgage products.
74 Freddie Mac