Freddie Mac 2015 Annual Report Download - page 250

Financial Statements Notes to the Consolidated Financial Statements | Note 5
Freddie Mac 2015 Form 10-K 248
value of REO are provided for and charged to REO operations (expense) income. Any gains and losses
from REO dispositions are included in REO operations (expense) income.
Our REO operations (expense) income includes:
• REO property expenses;
• Net gains or losses incurred on disposition of REO properties;
• Adjustments to the holding period allowance associated with REO properties to record them at the
lower of their carrying amount or fair value less the estimated costs to sell; and
• Recoveries from insurance and other credit enhancements.
An allowance for estimated declines in the REO fair value during the period properties are held reduces
the carrying value of REO property. Excluding holding period valuation adjustments and recoveries, we
recognized gains of $20 million, $461 million, and $761 million on REO dispositions during 2015, 2014,
and 2013, respectively.
NON-CASH INVESTING AND FINANCING ACTIVITIES
REO property acquisitions as a result of the derecognition of loans held on our consolidated balance
sheets upon foreclosure of the underlying collateral or deed in lieu of foreclosure represent non-cash
transfers. During the years ended December 31, 2015, 2014, and 2013, we had transfers of $2.0 billion,
$3.8 billion, and $6.1 billion, respectively, from loans to REO.