Freddie Mac 2012 Annual Report Download - page 152

Table 48 — Single-Family Loan Workouts, Serious Delinquency, and Foreclosures Volumes(1)
Years Ended December 31,
2012 2011 2010
Number
of Loans
Loan
Balances
Number
of Loans
Loan
Balances
Number
of Loans
Loan
Balances
(dollars in millions)
Home retention actions:
Loan modifications
with no change in terms(2) ................................... 533 $ 95 4,371 $ 778 4,639 $ 799
with term extension ....................................... 3,894 313 16,354 3,011 20,664 3,602
with reduction of contractual interest rate and, in certain cases, term
extension ............................................. 38,871 6,246 68,584 15,231 114,686 25,277
with rate reduction, term extension and principal forbearance ......... 26,283 8,483 19,865 5,319 30,288 7,915
Total loan modifications(3) ....................................... 69,581 15,137 109,174 24,339 170,277 37,593
Repayment plans(4) .......................................... 33,350 4,746 33,421 4,787 31,210 4,523
Forbearance agreements(5) ..................................... 13,026 2,557 19,516 3,821 34,594 7,156
Total home retention actions ..................................... 115,957 22,440 162,111 32,947 236,081 49,272
Foreclosure alternatives:
Short sale ................................................ 51,972 11,626 45,623 10,524 38,773 9,109
Deed in lieu of foreclosure transactions ........................... 1,036 179 540 94 402 63
Total foreclosure alternatives .................................... 53,008 11,805 46,163 10,618 39,175 9,172
Total single-family loan workouts ................................. 168,965 $34,245 208,274 $43,565 275,256 $58,444
Seriously delinquent loan additions ................................ 305,449 374,970 502,710
Single-family foreclosures(6) ..................................... 105,060 121,751 142,877
Seriously delinquent loans, at period end ............................ 352,860 414,134 462,439
(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 5).
(2) Under this modification type, past due amounts are added to the principal balance and reamortized based on the original contractual loan terms.
(3) 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.
(4) 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 15,467 and 21,382 borrowers as of
December 31, 2012 and 2011, respectively.
(5) 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 quarter; however, a single loan
may be included under separate forbearance agreements in separate periods.
(6) 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 a decline in home retention actions, particularly loan modifications, in 2012 compared to 2011;
however, the volume of our modifications that include forbearance of principal and the portion of our modification volume
that was non-HAMP-related both increased in 2012 compared to 2011. We attribute the increase in the portion of our
modification volume that was non-HAMP-related to the introduction of our non-HAMP standard modification in late 2011.
The decline in the total volume of completed loan modifications was primarily due to improved loan performance, which
resulted in a reduction in the volume of loans transitioning to serious delinquency, as well as the fact that a large number of
troubled borrowers have already completed loan modifications or foreclosure alternatives. While our overall loan workout
volume declined more than 18% in 2012, our foreclosure alternative volume increased 15%, compared to 2011. We expect
the volume of foreclosure alternatives will remain high in 2013 primarily because we offer incentives to servicers to
complete short sales instead of foreclosures. See “BUSINESS — Our Business Segments — Single-Family Guarantee
Segment —Servicing Alignment Initiative.”
The UPB of loans in our single-family credit guarantee portfolio for which we have completed a loan modification
increased to $75 billion as of December 31, 2012 from $69 billion as of December 31, 2011. The number of modified loans
in our single-family credit guarantee portfolio continued to increase and such loans comprised approximately 3.4% and 2.9%
of our single-family credit guarantee portfolio as of December 31, 2012 and December 31, 2011, respectively. For the year
ended December 31, 2012, approximately 55% of our loan modifications related to loans which were 180 days or more
delinquent prior to the modification effective date. The estimated current LTV ratio for all modified loans in our single-
family credit guarantee portfolio was 115% at December 31, 2012. The serious delinquency rate on these loans was 16.6% as
of December 31, 2012.
147 Freddie Mac