Freddie Mac 2011 Annual Report Download - page 162

Table 53 — Single-Family Loan Workouts, Serious Delinquency, and Foreclosures Volumes
(1)
Number of
Loans
Loan
Balances
Number of
Loans
Loan
Balances
Number of
Loans
Loan
Balances
2011 2010 2009
Years Ended December 31,
(dollars in millions)
Home retention actions:
Loan modifications
(2)
with no change in terms
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,371 $ 778 4,639 $ 799 5,866 $ 1,008
with term extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,354 3,011 20,664 3,602 15,596 2,500
with reduction of contractual interest rate and, in certain cases,
term extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,584 15,231 114,686 25,277 40,915 8,605
with rate reduction, term extension and principal forbearance . . . . 19,865 5,319 30,288 7,915 2,667 621
Total loan modifications
(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,174 24,339 170,277 37,593 65,044 12,734
Repayment plans
(5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,421 4,787 31,210 4,523 33,725 4,711
Forbearance agreements
(6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,516 3,821 34,594 7,156 14,628 2,848
Total home retention actions: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,111 32,947 236,081 49,272 113,397 20,293
Foreclosure alternatives:
Short sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,623 10,524 38,773 9,109 18,890 4,481
Deed in lieu of foreclosure transactions . . . . . . . . . . . . . . . . . . . . 540 94 402 63 329 56
Total foreclosure alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,163 10,618 39,175 9,172 19,219 4,537
Total single-family loan workouts . . . . . . . . . . . . . . . . . . . . . . . . . . 208,274 $43,565 275,256 $58,444 132,616 $24,830
Seriously delinquent loan additions . . . . . . . . . . . . . . . . . . . . . . . . . 374,970 502,710 597,188
Single-family foreclosures
(7)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,751 142,877 90,436
Seriously delinquent loans, at period end . . . . . . . . . . . . . . . . . . . . . 414,134 462,439 498,829
(1) Based on completed actions with borrowers for loans within our single-family credit guarantee portfolio. Excludes those modification, repayment
and forbearance activities for which the borrower has started the required process, but the actions have not been made permanent or effective, such
as loans in modification trial periods. Also excludes certain loan workouts where our single-family seller/servicers have executed agreements in the
current or prior periods, but these have not been incorporated into certain of our operational systems, due to delays in processing. These categories
are not mutually exclusive and a loan in one category may also be included within another category in the same period (see endnote 6).
(2) As a result of our adoption of an amendment to the accounting guidance on the classification of loans as TDRs, which became effective in the third
quarter of 2011, the population of loans we account for as TDRs significantly increased due to the inclusion of loans that were not previously
considered TDRs, including those loans that were subject to workout activities that occurred during the first half of 2011. See “NOTE 5:
INDIVIDUALLY IMPAIRED AND NON-PERFORMING LOANS” for more information.
(3) Under this modification type, past due amounts are added to the principal balance and reamortized based on the original contractual loan terms.
(4) Includes completed loan modifications under HAMP; however, the number of such completions differs from that reported by the MHA Program
administrator in part due to differences in the timing of recognizing the completions by us and the administrator.
(5) Represents the number of borrowers as reported by our seller/servicers that have completed the full term of a repayment plan for past due amounts.
Excludes the number of borrowers that are actively repaying past due amounts under a repayment plan, which totaled 21,382 and 23,151 borrowers
as of December 31, 2011 and 2010, respectively.
(6) Excludes loans with long-term forbearance under a completed loan modification. Many borrowers complete a short-term forbearance agreement
before another loan workout is pursued or completed. We only report forbearance activity for a single loan once during each quarterly period;
however, a single loan may be included under separate forbearance agreements in separate periods.
(7) Represents the number of our single-family loans that complete foreclosure transfers, including third-party sales at foreclosure auction in which
ownership of the property is transferred directly to a third-party rather than to us.
We experienced declines in home retention actions, particularly loan modifications, in 2011 compared to 2010,
primarily due to declines in the number of seriously delinquent loan additions and in borrower participation in HAMP in
2011. A large number of borrowers entered into HAMP trial period plans when the program was initially introduced in
2009, and completed or terminated their modifications in 2010. Significantly fewer borrowers entered into HAMP trial
period plans beginning in the second half of 2010 when we changed the income documentation requirements. The UPB of
loans in our single-family credit guarantee portfolio for which we have completed a loan modification increased to
$69 billion as of December 31, 2011 from $52 billion as of December 31, 2010. The number of modified loans in our
single-family credit guarantee portfolio continued to increase and such loans comprised approximately 2.9% and 2.1% of
our single-family credit guarantee portfolio as of December 31, 2011 and December 31, 2010, respectively. The estimated
current LTV ratio for all modified loans in our single-family credit guarantee portfolio was 123% and the serious
delinquency rate on these loans was 17.2% as of December 31, 2011.
Foreclosure alternative volume increased 18% in 2011, compared to 2010, and we expect the volume of foreclosure
alternatives to remain high in 2012 primarily because we offer incentives to servicers to complete short sales instead of
foreclosures. We plan to introduce additional initiatives in 2012 designed to help more distressed borrowers avoid
foreclosure through short sale and deed in lieu of foreclosure transactions.
The table below presents the reperformance rate of modified single-family loans in each of the last eight quarterly
periods.
157 Freddie Mac