Freddie Mac 2015 Annual Report Download - page 26

Management's Discussion and Analysis Consolidated Results of Operations | Provision for Credit Losses
Freddie Mac 2015 Form 10-K 24
BENEFIT (PROVISION) FOR CREDIT LOSSES
The table below presents the components of our benefit (provision) for credit losses.
Year Ended December 31, Change 2015-2014 Change 2014-2013
(dollars in billions) 2015 2014 2013 $ % $ %
Provision for newly impaired loans $ (0.9) $ (1.7) $ (2.5) $ 0.8 47 % $ 0.8 32 %
Amortization of interest rate concessions 1.2 1.4 1.0 (0.2) (14)% 0.4 40 %
Reclassifications of held-for-investment loans to
held-for-sale loans 2.3 0.1 — 2.2 2,200 % 0.1 N/A
Other, including changes in estimated default
probability and loss severity 0.1 0.1 4.0 — — % (3.9) (98)%
Benefit (provision) for credit losses $ 2.7 $ (0.1) $ 2.5 $ 2.8 2,800 % $ (2.6) (104)%
Key Drivers:
• The main driver of the benefit for credit losses in 2015 was the reclassifications of loans from held-for-
investment to held-for sale in connection with our efforts to sell seriously delinquent single-family
loans. See "Effect of Loan Reclassifications" for the effect of these loan reclassifications on pre-tax
net income.
• The provision for newly impaired loans decreased in 2015 and 2014 due to declines in the volume of
newly delinquent single-family loans in both years.
• The benefit (provision) for credit losses in 2014 and 2013 reflect benefits of $0.3 billion and $1.7
billion, respectively, related to settlement agreements with certain sellers to release specified loans
from certain repurchase obligations in exchange for one-time cash payments primarily associated
with our Legacy single-family book.