Freddie Mac 2015 Annual Report Download - page 110

Management's Discussion and Analysis Risk Management | SF Credit Risk
Freddie Mac 2015 Form 10-K 108
TDRs and Individually Impaired Loans
Single-family loans that have been individually evaluated for impairment, such as modified loans,
generally have a higher associated loan loss reserve than loans that have been collectively evaluated for
impairment. Due to the large number of loan modifications completed in recent years, a significant portion
of our loan loss reserves is attributable to individually impaired single-family loans. The reserves
associated with individually impaired loans, which comprised approximately 67% of the loan loss reserves
for single-family loans as of December 31, 2015, largely reflect interest rate concessions for the borrower.
Most of our modified single-family loans, including TDRs, were current and performing at December 31,
2015. We expect our loan loss reserve associated with existing single-family TDRs to continue to decline
over time as borrowers continue to make monthly payments under the modified terms and interest rate
concessions are amortized into earnings.
The table below summarizes the carrying value for individually impaired single-family loans on our
consolidated balance sheets for which we have recorded a specific reserve.
2015 2014
(dollars in millions) Loan Count Amount Loan Count Amount
TDRs, beginning balance 539,590 $94,401 514,497 $ 92,505
New additions 59,887 8,227 84,334 12,581
Repayments and reclassifications to held-for-sale (69,720) (13,975) (33,104) (6,218)
Foreclosure transfers and foreclosure alternatives (17,871) (2,789) (26,137) (4,467)
TDRs, ending balance 511,886 85,864 539,590 94,401
Loans impaired upon purchase 9,535 678 9,949 741
Total impaired loans with specific reserve 521,421 86,542 549,539 95,142
Allowance for loan losses (14,019) (17,837)
Net investment, at December 31, $ 72,523 $77,305
The table below provides information about the UPB of single-family TDRs and non-accrual loans on our
consolidated balance sheets.
December 31,
(in millions) 2015 2014 2013 2012 2011
TDRs on accrual status $ 82,026 $ 82,373 $78,033 $65,784 $44,440
Non-accrual loans 22,460 32,745 42,829 61,517 74,686
Total TDRs and non-accrual loans $ 104,486 $ 115,118 $ 120,862 $ 127,301 $ 119,126
Loan loss reserves associated with:
TDRs on accrual status $ 12,105 $ 13,728 $14,239 $12,430 $11,595
Non-accrual loans 2,677 6,935 8,805 14,602 20,770
Total $ 14,782 $ 20,663 $23,044 $27,032 $32,365
Year Ended December 31,
(in millions) 2015 2014 2013 2012 2011
Foregone interest income on TDRs
and non-accrual loans(1) $2,690 $3,235 $3,552 $4,126 $4,369
(1) Represents the amount of interest income that we would have recognized for loans outstanding at the end of each period,
had the loans performed according to their original contractual terms.