Freddie Mac 2012 Annual Report Download - page 138

those dates had current LTV ratios greater than 100%. Loans with current LTV ratios greater than 100% comprised 15% and
20%, of our single-family credit guarantee portfolio, based on UPB at December 31, 2012 and 2011, respectively, and
comprised approximately 82% and 83% of our credit losses recognized in 2012 and 2011, respectively. As of December 31,
2012 and 2011, for the loans in our single-family credit guarantee portfolio with greater than 80% estimated current LTV
ratios, the borrowers had a weighted average credit score at origination of 722 and 724, respectively.
We believe the replacement of the loans originated in 2005 to 2008 has positively impacted the payment performance,
including the serious delinquency rates, of our single-family credit guarantee portfolio. However, the rate at which this
replacement is occurring continues to be negatively affected by low demand for new purchase mortgage originations and a
lengthy foreclosure process in many states. For the years ended December 31, 2012 and 2011, loans originated in 2005
through 2008 in our single-family credit guarantee portfolio comprised approximately 87% and 90%, respectively, of our
credit losses.
Characteristics of the Single-Family Credit Guarantee Portfolio
The average UPB of loans in our single-family credit guarantee portfolio was approximately $151,000 at both
December 31, 2012 and 2011, respectively. We purchased or issued other guarantee commitments for approximately
2,036,000 and 1,519,000 single-family loans totaling $426.8 billion and $320.8 billion of UPB during 2012 and 2011,
respectively. Our single-family credit guarantee portfolio predominately consists of first-lien, fixed-rate mortgage loans
secured by the borrower’s primary residence. Our guarantees related to second-lien mortgage loans in the single-family credit
guarantee portfolio are insignificant. Approximately 96% of the single-family mortgages we purchased in 2012 were fixed-
rate amortizing mortgages, based on UPB. Approximately 82% of the single-family mortgages we purchased in 2012 were
refinance mortgages, including approximately 29% that were relief refinance mortgages, based on UPB.
The credit quality of the single-family loans we acquired beginning in 2009 (excluding HARP and other relief refinance
mortgages) is significantly better than that of loans we acquired from 2005 through 2008, as measured by original LTV
ratios, FICO scores, and the proportion of loans underwritten with fully documented income. Mortgages originated after
2008, including HARP loans, comprised an increasing proportion of the portfolio during 2012, and the proportion of loans
originated prior to 2009 within the portfolio continued to decline.
The percentage of home purchase loans in our loan acquisition volume continued to remain at low levels and refinance
activity remained high during 2012. During 2012 and 2011, we purchased or guaranteed 1.7 million and 1.2 million,
respectively, of single-family loans that were refinance mortgages totaling $351.1 billion and $249.5 billion in UPB,
respectively. As of December 31, 2012 and 2011, there were approximately 10.9 million and 11.6 million loans, respectively,
in our single-family credit guarantee portfolio, including 1.6 million and 1.1 million, respectively, of these that were relief
refinance mortgages.
The tables below provide additional characteristics of single-family mortgage loans purchased during 2012, 2011 and
2010, and of our single-family credit guarantee portfolio at December 31, 2012, 2011, and 2010.
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