Mortgage Loans

6 Months Ended

Jun. 30, 2013

Mortgage Loans on Real Estate [Abstract]

The following table displays our mortgage loans as of June 30, 2013 and December 31, 2012.



	As of
	June 30, 2013												December 31, 2012
	Of Fannie Mae				Of Consolidated Trusts				Total				Of Fannie Mae				Of Consolidated Trusts				Total
	(Dollars in millions)
Single-family		$	293,790			$	2,510,827			$	2,804,617			$	309,277			$	2,480,999			$	2,790,276
Multifamily		49,502				138,793				188,295				61,464				126,953				188,417
Total unpaid principal balance of mortgage loans		343,292				2,649,620				2,992,912				370,741				2,607,952				2,978,693
Cost basis and fair value adjustments, net		(14,275		)		47,060				32,785				(14,805		)		44,313				29,508
Allowance for loan losses for loans held for investment		(44,825		)		(4,818		)		(49,643		)		(50,519		)		(8,276		)		(58,795		)
Total mortgage loans		$	284,192			$	2,691,862			$	2,976,054			$	305,417			$	2,643,989			$	2,949,406

Nonaccrual Loans

We discontinue accruing interest on loans when we believe collectibility of principal or interest is not reasonably assured, which for single-family loans we have determined, based on our historical experience, to be when the loan becomes two months or more past due according to its contractual terms. We generally place multifamily loans on nonaccrual status when the loan is deemed to be individually impaired, unless the loan is well secured such that collectibility of principal and accrued interest is reasonably assured.

When a loan is placed on nonaccrual status, interest previously accrued but not collected becomes part of our recorded investment in the loan and is collectively reviewed for impairment. For single-family loans, we recognize interest income for loans on nonaccrual status when cash is received. For multifamily loans on nonaccrual status, we apply any payment received on a cost recovery basis to reduce principal on the mortgage loan.

We return a single-family loan to accrual status at the point that the borrower has made sufficient payments to reduce their delinquency below our nonaccrual threshold. For modified single-family loans, the loan is not returned to accrual status until the borrower successfully makes all required payments during the trial period (generally three to four months) and the modification is made permanent. We generally return a multifamily loan to accrual status when the borrower cures the delinquency of the loan or we otherwise determine that the loan is well secured such that collectibility is reasonably assured.

Aging Analysis

The following tables display an aging analysis of the total recorded investment in our HFI mortgage loans, excluding loans for which we have elected the fair value option, by portfolio segment and class as of June 30, 2013 and December 31, 2012.



	As of June 30, 2013⁽¹⁾
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽²⁾			Total Delinquent			Current		Total		Recorded Investment in Loans 90 Days or More Delinquent and Accruing Interest			Recorded Investment in Nonaccrual Loans
	(Dollars in millions)
Single-family:
Primary⁽³⁾		$	36,445		$	10,032		$	56,181		$	102,658	$	2,480,511	$	2,583,169		$	96	$	66,062
Government⁽⁴⁾		82			32			345			459		49,621		50,080			345		—
Alt-A		5,613			1,780			18,260			25,653		112,382		138,035			15		20,020
Other⁽⁵⁾		2,373			761			6,671			9,805		49,791		59,596			32		7,353
Total single-family		44,513			12,605			81,457			138,575		2,692,305		2,830,880			488		93,435
Multifamily⁽⁶⁾		103			NA			548			651		189,885		190,536			1		2,524
Total		$	44,616		$	12,605		$	82,005		$	139,226	$	2,882,190	$	3,021,416		$	489	$	95,959



	As of December 31, 2012⁽¹⁾
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽²⁾			Total Delinquent			Current		Total		Recorded Investment in Loans 90 Days or More Delinquent and Accruing Interest⁽⁷⁾			Recorded Investment in Nonaccrual Loans
	(Dollars in millions)
Single-family:
Primary⁽³⁾		$	39,043		$	13,513		$	67,737		$	120,293	$	2,424,022	$	2,544,315		$	2,162	$	78,822
Government⁽⁴⁾		82			40			340			462		50,408		50,870			340		—
Alt-A		6,009			2,417			22,181			30,607		121,099		151,706			502		24,048
Other⁽⁵⁾		2,613			1,053			8,527			12,193		57,336		69,529			297		9,209
Total single-family		47,747			17,023			98,785			163,555		2,652,865		2,816,420			3,301		112,079
Multifamily⁽⁶⁾		178			NA			428			606		190,445		191,051			—		2,214
Total		$	47,925		$	17,023		$	99,213		$	164,161	$	2,843,310	$	3,007,471		$	3,301	$	114,293

__________


⁽¹⁾	Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.


⁽²⁾	Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process. Multifamily seriously delinquent loans are loans that are 60 days or more past due.


⁽³⁾	Consists of mortgage loans that are not included in other loan classes.


⁽⁴⁾	Consists of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A. Primarily consists of reverse mortgages which, due to their nature, are not aged and are included in the current column.


⁽⁵⁾	Includes loans with higher-risk loan characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.


⁽⁶⁾	Multifamily loans 60-89 days delinquent are included in the seriously delinquent column.


⁽⁷⁾	Includes loans with a recorded investment of $2.8 billion, which were repurchased in January 2013 pursuant to our resolution agreement with Bank of America. These loans were returned to accrual status to reflect the change in our assessment of collectability resulting from this agreement.

Credit Quality Indicators

The following table displays the total recorded investment in our single-family HFI loans, excluding loans for which we have elected the fair value option, by class and credit quality indicator as of June 30, 2013 and December 31, 2012. The single-family credit quality indicator is updated quarterly.



	As of
	June 30, 2013⁽¹⁾⁽²⁾							December 31, 2012⁽¹⁾⁽²⁾
	Primary⁽³⁾		Alt-A		Other⁽⁴⁾			Primary⁽³⁾		Alt-A		Other⁽⁴⁾
	(Dollars in millions)
Estimated mark-to-market LTV ratio:⁽⁵⁾
Less than or equal to 80%	$	1,917,135	$	59,516		$	23,170	$	1,703,384	$	57,419		$	21,936
Greater than 80%and less than or equal to 90%	295,674		17,262			6,813		346,018		18,313			7,287
Greater than 90%and less than or equal to 100%	169,050		15,627			6,955		219,736		16,930			7,369
Greater than 100%and less than or equal to 110%	76,126		12,503			6,085		100,302		14,293			7,169
Greater than 110% and less than or equal to 120%	44,705		9,366			4,838		59,723		10,994			6,231
Greater than 120% and less than or equal to 125%	15,143		3,691			1,950		20,620		4,387			2,665
Greater than 125%	65,336		20,070			9,785		94,532		29,370			16,872
Total	$	2,583,169	$	138,035		$	59,596	$	2,544,315	$	151,706		$	69,529

__________


⁽¹⁾	Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.


⁽²⁾	Excludes $50.1 billion and $50.9 billion as of June 30, 2013 and December 31, 2012, respectively, of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A loans. The segment class is primarily reverse mortgages for which we do not calculate an estimated mark-to-market LTV ratio.


⁽³⁾	Consists of mortgage loans that are not included in other loan classes.


⁽⁴⁾	Includes loans with higher-risk loan characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.


⁽⁵⁾	The aggregate estimated mark-to-market LTV ratio is based on the unpaid principal balance of the loan as of the end of each reported period divided by the estimated current value of the property, which we calculate using an internal valuation model that estimates periodic changes in home value.

The following table displays the total recorded investment in our multifamily HFI loans, excluding loans for which we have elected the fair value option, by credit quality indicator as of June 30, 2013 and December 31, 2012. The multifamily credit quality indicator is updated quarterly.



	As of
	June 30, 2013⁽¹⁾			December 31, 2012⁽¹⁾
	(Dollars in millions)
Credit risk profile by internally assigned grade:⁽²⁾
Green		$	161,420		$	154,235
Yellow⁽³⁾		16,644			21,304
Orange		11,260			14,199
Red		1,212			1,313
Total		$	190,536		$	191,051

__________


⁽¹⁾	Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.


⁽²⁾	Green (loan with acceptable risk); yellow (loan with signs of potential weakness); orange (loan with a well defined weakness that may jeopardize the timely full repayment); and red (loan with a weakness that makes timely collection or liquidation in full more questionable based on existing conditions and values).


⁽³⁾	Includes approximately $3.4 billion and $5.1 billion of unpaid principal balance as of June 30, 2013 and December 31, 2012, respectively, classified as yellow due to no available current financial information.

Individually Impaired Loans

Individually impaired loans include troubled debt restructurings (“TDRs”), acquired credit-impaired loans, and multifamily loans that we have assessed as probable that we will not collect all contractual amounts due, regardless of whether we are currently accruing interest. The following tables display the total recorded investment, unpaid principal balance and related allowance as of June 30, 2013 and December 31, 2012, and interest income recognized and average recorded investment for the three and six months ended June 30, 2013 and 2012, for individually impaired loans.



	As of
	June 30, 2013										December 31, 2012
	Unpaid Principal Balance			Total Recorded Investment⁽¹⁾			Related Allowance for Loan Losses		Related Allowance for Accrued Interest Receivable		Unpaid Principal Balance			Total Recorded Investment⁽¹⁾			Related Allowance for Loan Losses		Related Allowance for Accrued Interest Receivable
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary⁽²⁾		$	131,229		$	124,661	$	25,761	$	505		$	132,754		$	126,106	$	28,610	$	628
Government⁽³⁾		218			212		37		4			214			208		38		4
Alt-A		37,977			35,099		10,114		217			38,387			35,620		11,154		267
Other⁽⁴⁾		16,269			15,502		4,219		67			16,873			16,114		4,743		86
Total single-family		185,693			175,474		40,131		793			188,228			178,048		44,545		985
Multifamily		2,645			2,667		452		15			2,449			2,471		489		13
Total individually impaired loans with related allowance recorded		188,338			178,141		40,583		808			190,677			180,519		45,034		998

With no related allowance recorded:⁽⁵⁾
Single-family:
Primary⁽²⁾		13,533			11,604		—		—			16,222			13,901		—		—
Government⁽³⁾		119			119		—		—			104			104		—		—
Alt-A		3,182			2,221		—		—			3,994			2,822		—		—
Other⁽⁴⁾		976			779		—		—			1,218			977		—		—
Total single-family		17,810			14,723		—		—			21,538			17,804		—		—
Multifamily		2,021			2,032		—		—			2,056			2,068		—		—
Total individually impaired loans with no related allowance recorded		19,831			16,755		—		—			23,594			19,872		—		—
Total individually impaired loans⁽⁶⁾		$	208,169		$	194,896	$	40,583	$	808		$	214,271		$	200,391	$	45,034	$	998



	For the Three Months Ended June 30,
	2013									2012
	Average Recorded Investment			Total Interest Income Recognized⁽⁷⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽⁷⁾			Interest Income Recognized on a Cash Basis
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary⁽²⁾		$	125,689		$	1,093		$	152		$	110,527		$	967		$	149
Government⁽³⁾		214			2			—			204			3			—
Alt-A		35,376			275			35			31,600			253			35
Other⁽⁴⁾		15,700			108			15			15,218			110			16
Total single-family		176,979			1,478			202			157,549			1,333			200
Multifamily		2,704			36			1			2,499			34			1
Total individually impaired loans with related allowance recorded		179,683			1,514			203			160,048			1,367			201

With no related allowance recorded:⁽⁵⁾
Single-family:
Primary⁽²⁾		10,301			283			57			7,367			254			61
Government⁽³⁾		112			2			—			88			1			—
Alt-A		1,972			55			12			1,672			60			13
Other⁽⁴⁾		661			23			5			399			20			6
Total single-family		13,046			363			74			9,526			335			80
Multifamily		1,666			25			—			1,712			26			—
Total individually impaired loans with no related allowance recorded		14,712			388			74			11,238			361			80
Total individually impaired loans⁽⁶⁾		$	194,395		$	1,902		$	277		$	171,286		$	1,728		$	281



	For the Six Months Ended June 30,
	2013									2012
	Average Recorded Investment			Total Interest Income Recognized⁽⁷⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽⁷⁾			Interest Income Recognized on a Cash Basis
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary⁽²⁾		$	125,663		$	2,195		$	325		$	110,154		$	1,940		$	322
Government⁽³⁾		211			5			—			227			6			—
Alt-A		35,422			552			74			31,543			506			74
Other⁽⁴⁾		15,830			217			29			15,232			220			34
Total single-family		177,126			2,969			428			157,156			2,672			430
Multifamily		2,628			67			1			2,620			65			1
Total individually impaired loans with related allowance recorded		179,754			3,036			429			159,776			2,737			431

With no related allowance recorded:⁽⁵⁾
Single-family:
Primary⁽²⁾		10,688			924			116			7,053			438			115
Government⁽³⁾		110			4			—			58			3			—
Alt-A		2,049			230			22			1,628			111			28
Other⁽⁴⁾		671			86			10			390			39			13
Total single-family		13,518			1,244			148			9,129			591			156
Multifamily		1,800			47			1			1,732			47			1
Total individually impaired loans with no related allowance recorded		15,318			1,291			149			10,861			638			157
Total individually impaired loans⁽⁶⁾		$	195,072		$	4,327		$	578		$	170,637		$	3,375		$	588

__________


⁽¹⁾	Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.


⁽²⁾	Consists of mortgage loans that are not included in other loan classes.


⁽³⁾	Consists of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A.


⁽⁴⁾	Includes loans with higher-risk characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.


⁽⁵⁾	The discounted cash flows or collateral value equals or exceeds the carrying value of the loan and, as such, no valuation allowance is required.


⁽⁶⁾	Includes single-family loans restructured in a TDR with a recorded investment of $188.4 billion and $193.4 billion as of June 30, 2013 and December 31, 2012, respectively. Includes multifamily loans restructured in a TDR with a recorded investment of $1.2 billion and $1.1 billion as of June 30, 2013 and December 31, 2012, respectively.

⁽⁷⁾

Total single-family interest income recognized of $1.8 billion and $1.7 billion for the three months ended June 30, 2013 and 2012, respectively, consists of $1.4 billion and $1.2 billion of contractual interest and $410 million and $436 million of effective yield adjustments. Total single-family interest income recognized of $4.2 billion and $3.3 billion for the six months ended June 30, 2013 and 2012, respectively, consists of $2.9 billion and $2.4 billion of contractual interest and $1.3 billion and $823 million of effective yield adjustments.

Troubled Debt Restructurings

A modification to the contractual terms of a loan that results in granting a concession to a borrower experiencing financial difficulties is considered a TDR. In addition to formal loan modifications, we also engage in other loss mitigation activities with troubled borrowers, which include repayment plans and forbearance arrangements, both of which represent informal agreements with the borrower that do not result in the legal modification of the loan’s contractual terms. We account for these informal restructurings as a TDR if we defer more than three missed payments. We also classify as TDRs loans to certain borrowers who have received bankruptcy relief.

The substantial majority of the loan modifications we complete result in term extensions, interest rate reductions or a combination of both. During the three months ended June 30, 2013 and 2012, the average term extension of a single-family modified loan was 154 and 119 months, respectively, and the average interest rate reduction was 1.70 and 2.34 percentage points, respectively. During the six months ended June 30, 2013 and 2012, the average term extension of a single-family modified loan was 151 and 124 months, respectively, and the average interest rate reduction was 1.76 and 2.30 percentage points, respectively.

The following table displays the number of loans and recorded investment in loans restructured in a TDR for the three and six months ended June 30, 2013 and 2012.



	For the Three Months Ended June 30,
	2013					2012
	Number of Loans		RecordedInvestment⁽¹⁾			Number of Loans		RecordedInvestment⁽¹⁾
	(Dollars in millions)
Single-family:
Primary⁽²⁾		31,304		$	4,833		31,886		$	5,367
Government⁽³⁾		90		10			92		14
Alt-A		5,175		947			6,293		1,286
Other⁽⁴⁾		1,641		370			2,193		549
Total single-family		38,210		6,160			40,464		7,216
Multifamily		17		135			8		65
Total troubled debt restructurings		38,227		$	6,295		40,472		$	7,281



	For the Six Months Ended June 30,
	2013					2012
	Number of Loans		RecordedInvestment⁽¹⁾			Number of Loans		RecordedInvestment⁽¹⁾
	(Dollars in millions)
Single-family:
Primary⁽²⁾		69,555		$	10,477		58,770		$	9,954
Government⁽³⁾		180		21			202		28
Alt-A		12,285		2,170			10,938		2,253
Other⁽⁴⁾		3,698		822			3,853		958
Total single-family		85,718		13,490			73,763		13,193
Multifamily		25		168			21		133
Total troubled debt restructurings		85,743		$	13,658		73,784		$	13,326

__________

⁽¹⁾

Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable. Based on the nature of our modification programs, which do not include principal or past-due interest forgiveness, there is not a material difference between the recorded investment in our loans pre- and post- modification, therefore amounts represent recorded investment post-modification.


⁽²⁾	Consists of mortgage loans that are not included in other loan classes.


⁽³⁾	Consists of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A.


⁽⁴⁾	Includes loans with higher-risk characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.

The following table displays the number of loans and recorded investment in loans that had a payment default for the three and six months ended June 30, 2013 and 2012 and were modified in a TDR in the twelve months prior to the payment default. For purposes of this disclosure, we define loans that had a payment default as single-family and multifamily loans with completed TDRs that liquidated during the period, either through foreclosure, deed-in-lieu of foreclosure or a short sale, single-family loans with completed modifications that are two or more months delinquent during the period or multifamily loans with completed modifications that are one or more months delinquent during the period.



	For the Three Months Ended June 30,
	2013					2012
	Number of Loans		RecordedInvestment⁽¹⁾			Number of Loans		RecordedInvestment⁽¹⁾
	(Dollars in millions)
Single-family:
Primary⁽²⁾		11,320		$	1,749		10,704		$	1,827
Government⁽³⁾		31		4			49		7
Alt-A		2,584		466			2,016		403
Other⁽⁴⁾		852		195			961		235
Total single-family		14,787		2,414			13,730		2,472
Multifamily		3		5			1		1
Total TDRs that subsequently defaulted		14,790		$	2,419		13,731		$	2,473



	For the Six Months Ended June 30,
	2013					2012
	Number of Loans		RecordedInvestment⁽¹⁾			Number of Loans		RecordedInvestment⁽¹⁾
	(Dollars in millions)
Single-family:
Primary⁽²⁾		23,380		$	3,616		22,576		$	3,901
Government⁽³⁾		60		8			99		17
Alt-A		5,256		950			4,259		869
Other⁽⁴⁾		1,675		380			2,156		523
Total single-family		30,371		4,954			29,090		5,310
Multifamily		6		20			2		3
Total TDRs that subsequently defaulted		30,377		$	4,974		29,092		$	5,313

__________


⁽¹⁾	Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable. Represents our recorded investment in the loan at time of payment default.


⁽²⁾	Consists of mortgage loans that are not included in other loan classes.


⁽³⁾	Consists of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies that are not Alt-A.


⁽⁴⁾	Includes loans with higher-risk characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.