Freddie Mac 2012 Annual Report Download - page 155

The table below presents serious delinquency rates for our single-family credit guarantee portfolio.
Table 50 — Single-Family Serious Delinquency Rates
As of December 31,
2012 2011 2010
Percentage
of Portfolio
Serious
Delinquency
Rate
Percentage
of Portfolio
Serious
Delinquency
Rate
Percentage
of Portfolio
Serious
Delinquency
Rate
Single-family:
Non-credit-enhanced ............................... 87% 2.66% 86% 2.84% 85% 3.01%
Credit-enhanced(1) .................................. 13 7.34 14 8.03 15 8.27
Total single-family credit guarantee portfolio(2) .............. 100% 3.25 100% 3.58 100% 3.84
(1) See “Institutional Credit Risk” for information about our counterparties that provide credit enhancement on loans in our single-family credit guarantee
portfolio.
(2) As of December 31, 2012, 2011, and 2010, approximately 68%, 68%, and 61%, respectively, of the single-family loans reported as seriously delinquent
were in the process of foreclosure.
Serious delinquency rates of our single-family credit guarantee portfolio declined to 3.25% as of December 31, 2012,
from 3.58% as of December 31, 2011 continuing the trend of improvement that began in 2010. Our serious delinquency rate
remains high compared to the rates in years prior to 2009 due to weakness in home prices in the last several years,
persistently high unemployment in many areas, extended foreclosure timelines, and continued challenges faced by servicers
in processing large volumes of problem loans, including adjusting their processes to accommodate changes in servicing
standards, such as those dictated by legislative or regulatory authorities. In addition, our serious delinquency rate at
December 31, 2012 was higher than it otherwise would have been due to the decline in the size of our single-family credit
guarantee portfolio during 2012, as this rate is calculated on a smaller number of loans at the end of the period.
Serious delinquency rates for interest-only and option ARM products, which together represented approximately 3% of
our total single-family credit guarantee portfolio at December 31, 2012, were both 16.3% as compared with 17.6% and
20.5%, respectively, at December 31, 2011. Serious delinquency rates of single-family fixed rate, amortizing loans with a
term of 20 years or more, a more traditional mortgage product, were approximately 3.7% and 3.9% at December 31, 2012
and 2011, respectively.
The tables below present serious delinquency rates categorized by borrower and loan characteristics, including
geographic region and origination year, which indicate that certain concentrations of loans have been more adversely affected
by declines in home prices and weak economic conditions since 2006. In certain states, our single-family serious delinquency
rates have remained persistently high. As of December 31, 2012, single-family loans in Arizona, California, Florida, and
Nevada comprised 25% of our single-family credit guarantee portfolio, and the serious delinquency rate of loans in these
states was 5.0%. As of December 31, 2012, seriously delinquent loans in the states of Florida, California, New York, New
Jersey, and Illinois collectively comprised approximately 47% of the seriously delinquent loans in our single-family credit
guarantee portfolio. During 2012, we also continued to experience high serious delinquency rates on single-family loans
originated between 2005 and 2008. We purchased significant amounts of loans with higher-risk characteristics in those years
and those borrowers have been more susceptible to the declines in home prices and weak economic conditions since 2006.
150 Freddie Mac