Freddie Mac 2011 Annual Report Download - page 249

remaining term. The table below reflects only performance of completed modifications and excludes loans subject to other
loss mitigation activity that were classified as TDRs.
Table 5.6 — Payment Defaults of Completed TDR Modifications, by Segment
(1)
# of Loans
Post-TDR Recorded
Investment
(2)
Year Ended December 31, 2011
(in millions, except number
of loans modified)
Single-family
20 and 30-year or more, amortizing fixed-rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,592 $4,417
15-year amortizing fixed-rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890 91
Adjustable-rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519 111
Alt-A, interest-only, and option ARM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,794 1,529
Total single-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,795 $6,148
Multifamily .................................................................... 7 $ 18
(1) Represents TDR loans that experienced a payment default during the period and had completed a modification event in the twelve months prior to
the payment default. A payment default occurs when a borrower either: (a) became two or more months delinquent; or (b) completed a loss event,
such as a short sale or foreclosure. We only include payment defaults for a single loan once during each quarterly period; however, a single loan will
be reflected more than once if the borrower experienced another payment default in a subsequent quarter.
(2) Represents the recorded investment at the end of the period in which the loan was modified and does not represent the recorded investment as of
December 31, 2011.
During 2011, there were 2,163 loans with other loss mitigation activities (i.e., repayment plan, forbearance
agreement, or trial period modifications) initially classified as TDRs, with a post-TDR recorded investment of
$371 million, that returned to a current payment status, and then subsequently became two months delinquent. In addition,
during 2011, there were 3,109 loans with other loss mitigation activities initially classified as TDRs, with a post-TDR
recorded investment of $520 million that subsequently experienced a loss event, such as a short sale or a foreclosure
transfer.
NOTE 6: REAL ESTATE OWNED
We obtain REO properties: (a) when we are the highest bidder at foreclosure sales of properties that collateralize
non-performing single-family and multifamily mortgage loans owned by us; or (b) when a delinquent borrower chooses to
transfer the mortgaged property to us in lieu of going through the foreclosure process. Upon acquiring single-family
properties, we establish a marketing plan to sell the property as soon as practicable by either listing it with a sales broker
or by other means, such as arranging a real estate auction. Upon acquiring multifamily properties, we may operate them
using third-party property-management firms for a period to stabilize value and then sell the properties through
commercial real estate brokers. However, certain jurisdictions require a period of time after foreclosure during which the
borrower may reclaim the property. During the period when the borrower may reclaim the property, or we are completing
the eviction process, we are not able to market the property and this extends our holding period for these properties. See
“NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” for a discussion of our significant accounting
policies for REO.
The table below provides a summary of the change in the carrying value of our combined single-family and
multifamily REO balances. For the periods presented in the table below, the weighted average holding period for our
disposed properties was less than one year.
244 Freddie Mac