XML 47 R9.htm IDEA: XBRL DOCUMENT v2.4.0.8
Mortgage Loans
3 Months Ended
Mar. 31, 2014
Mortgage Loans on Real Estate [Abstract]  
Mortgage Loans
 Mortgage Loans
The following table displays our mortgage loans as of March 31, 2014 and December 31, 2013.
 
As of
 
March 31, 2014
 
December 31, 2013
 
Of Fannie Mae
 
Of Consolidated Trusts
 
Total
 
Of Fannie Mae
 
Of Consolidated Trusts
 
Total
 
(Dollars in millions)
Single-family
 
$
271,947

 
 
 
$
2,574,278

 
 
 
$
2,846,225

 
 
 
$
276,644

 
 
 
$
2,579,024

 
 
 
$
2,855,668

 
Multifamily
 
33,680

 
 
 
148,822

 
 
 
182,502

 
 
 
37,642

 
 
 
146,249

 
 
 
183,891

 
Total unpaid principal balance of mortgage loans
 
305,627

 
 
 
2,723,100

 
 
 
3,028,727

 
 
 
314,286

 
 
 
2,725,273

 
 
 
3,039,559

 
Cost basis and fair value adjustments, net
 
(13,431
)
 
 
 
44,631

 
 
 
31,200

 
 
 
(13,778
)
 
 
 
44,305

 
 
 
30,527

 
Allowance for loan losses for loans held for investment
 
(39,004
)
 
 
 
(2,907
)
 
 
 
(41,911
)
 
 
 
(40,521
)
 
 
 
(3,325
)
 
 
 
(43,846
)
 
Total mortgage loans
 
$
253,192

 
 
 
$
2,764,824

 
 
 
$
3,018,016

 
 
 
$
259,987

 
 
 
$
2,766,253

 
 
 
$
3,026,240

 

During the three months ended March 31, 2014, we redesignated loans with a carrying value of $2.2 billion from held for investment (“HFI”) to held for sale (“HFS”) and sold loans with an unpaid principal balance of $1.0 billion.
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 reviewed for impairment in connection with our allowance for loan losses process. 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 March 31, 2014 and December 31, 2013.
  
As of March 31, 2014(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)
 
$
27,858

 
 
 
$
8,090

 
 
 
$
44,625

 
 
 
$
80,573

 
 
$
2,566,501

 
$
2,647,074

 
 
$
65

 
 
$
52,614

Government(4)
 
59

 
 
 
23

 
 
 
348

 
 
 
430

 
 
47,466

 
47,896

 
 
348

 
 

Alt-A
 
4,488

 
 
 
1,501

 
 
 
14,227

 
 
 
20,216

 
 
103,452

 
123,668

 
 
9

 
 
15,716

Other(5)
 
1,699

 
 
 
552

 
 
 
4,866

 
 
 
7,117

 
 
44,003

 
51,120

 
 
25

 
 
5,361

Total single-family
 
34,104

 
 
 
10,166

 
 
 
64,066

 
 
 
108,336

 
 
2,761,422

 
2,869,758

 
 
447

 
 
73,691

Multifamily(6)
 
45

 
 
 
N/A

 
 
 
187

 
 
 
232

 
 
183,127

 
183,359

 
 

 
 
1,840

Total
 
$
34,149

 
 
 
$
10,166

 
 
 
$
64,253

 
 
 
$
108,568

 
 
$
2,944,549

 
$
3,053,117

 
 
$
447

 
 
$
75,531

  
As of December 31, 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)
 
$
32,371

 
 
 
$
9,755

 
 
 
$
48,345

 
 
 
$
90,471

 
 
$
2,558,826

 
$
2,649,297

 
 
$
81

 
 
$
57,973

Government(4)
 
66

 
 
 
32

 
 
 
346

 
 
 
444

 
 
48,150

 
48,594

 
 
346

 
 

Alt-A
 
4,748

 
 
 
1,692

 
 
 
15,425

 
 
 
21,865

 
 
105,644

 
127,509

 
 
11

 
 
17,102

Other(5)
 
1,940

 
 
 
659

 
 
 
5,404

 
 
 
8,003

 
 
45,288

 
53,291

 
 
22

 
 
5,999

Total single-family
 
39,125

 
 
 
12,138

 
 
 
69,520

 
 
 
120,783

 
 
2,757,908

 
2,878,691

 
 
460

 
 
81,074

Multifamily(6)
 
59

 
 
 
 N/A

 
 
 
186

 
 
 
245

 
 
185,733

 
185,978

 
 

 
 
2,209

Total
 
$
39,184

 
 
 
$
12,138

 
 
 
$
69,706

 
 
 
$
121,028

 
 
$
2,943,641

 
$
3,064,669

 
 
$
460

 
 
$
83,283

__________
(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 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.
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 March 31, 2014 and December 31, 2013. The single-family credit quality indicator is based on available data through the end of each period presented.
  
As of
  
March 31, 2014(1)(2)
 
December 31, 2013(1)(2)
  
Primary(3)
 
Alt-A
 
Other(4)
 
Primary(3)
 
Alt-A
 
Other(4)
  
(Dollars in millions) 
Estimated mark-to-market loan-to-value ratio:(5)
  
 
 
 
 
  
 
 
  
 
 
 
 
  
 
Less than or equal to 80% 
$
2,059,320

 
$
60,043

 
 
$
23,524

 
 
$
2,073,079

 
$
61,670

 
 
$
24,112

 
Greater than 80%  and less than or equal to 90%
281,067

 
16,352

 
 
6,593

 
 
276,011

 
16,794

 
 
6,947

 
Greater than 90%  and less than or equal to 100%
161,156

 
14,327

 
 
6,150

 
 
153,474

 
14,709

 
 
6,402

 
Greater than 100% and less than or equal to 110%
60,429

 
10,873

 
 
4,871

 
 
59,630

 
11,006

 
 
5,146

 
Greater than 110%  and less than or equal to 120%
33,952

 
7,615

 
 
3,538

 
 
33,954

 
7,742

 
 
3,691

 
Greater than 120%  and less than or equal to 125%
11,191

 
2,826

 
 
1,343

 
 
11,256

 
2,951

 
 
1,406

 
Greater than 125% 
39,959

 
11,632

 
 
5,101

 
 
41,893

 
12,637

 
 
5,587

 
Total 
$
2,647,074

 
$
123,668

 
 
$
51,120

 
 
$
2,649,297

 
$
127,509

 
 
$
53,291

 
__________
(1) 
Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.
(2) 
Excludes $47.9 billion and $48.6 billion as of March 31, 2014 and December 31, 2013, 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 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 March 31, 2014 and December 31, 2013. The multifamily credit quality indicator is based on available data through the end of each period presented.
  
As of
  
March 31,
 
December 31,
 
2014(1)
 
2013(1)
  
(Dollars in millions) 
Credit risk profile by internally assigned grade:(2)
 
  
 
 
 
 
 
Pass
 
$
174,805

 
 
 
$
176,528

 
Special Mention
 
2,166

 
 
 
2,234

 
Substandard
 
6,027

 
 
 
6,758

 
Doubtful
 
361

 
 
 
458

 
Total
 
$
183,359

 
 
 
$
185,978

 
_________
(1) 
Recorded investment consists of unpaid principal balance, unamortized premiums, discounts and other cost basis adjustments, and accrued interest receivable.
(2) 
Pass (loan is current and adequately protected by the current financial strength and debt service capacity of the borrower); special mention (loan with signs of potential weakness); substandard (loan with a well defined weakness that jeopardizes the timely full repayment); and doubtful (loan with a weakness that makes collection or liquidation in full highly questionable and improbable based on existing conditions and values).
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 unpaid principal balance, recorded investment and related allowance as of March 31, 2014 and December 31, 2013, and interest income recognized and average recorded investment for the three months ended March 31, 2014 and 2013, for individually impaired loans.
 
As of
 
March 31, 2014
 
December 31, 2013
 
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)
 
$
130,023

 
 
 
$
123,571

 
 
$
23,662

 
$
394

 
 
$
130,080

 
 
 
$
123,631

 
 
$
24,145

 
$
430

Government(3)
 
272

 
 
 
276

 
 
39

 
12

 
 
213

 
 
 
210

 
 
35

 
5

Alt-A
 
37,108

 
 
 
34,219

 
 
9,125

 
172

 
 
37,356

 
 
 
34,479

 
 
9,364

 
187

Other(4)
 
15,586

 
 
 
14,803

 
 
3,754

 
51

 
 
15,789

 
 
 
15,023

 
 
3,879

 
56

Total single-family
 
182,989

 
 
 
172,869

 
 
36,580

 
629

 
 
183,438

 
 
 
173,343

 
 
37,423

 
678

Multifamily
 
1,882

 
 
 
1,897

 
 
258

 
7

 
 
2,257

 
 
 
2,276

 
 
306

 
10

Total individually impaired loans with related allowance recorded
 
184,871

 
 
 
174,766

 
 
36,838

 
636

 
 
185,695

 
 
 
175,619

 
 
37,729

 
688

 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
With no related allowance recorded:(5)
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
Single-family:
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
Primary(2)
 
14,392

 
 
 
12,849

 
 

 

 
 
14,076

 
 
 
12,305

 
 

 

Government(3)
 
66

 
 
 
61

 
 

 

 
 
120

 
 
 
120

 
 

 

Alt-A
 
3,396

 
 
 
2,595

 
 

 

 
 
3,290

 
 
 
2,428

 
 

 

Other(4)
 
1,069

 
 
 
907

 
 

 

 
 
1,039

 
 
 
868

 
 

 

Total single-family
 
18,923

 
 
 
16,412

 
 

 

 
 
18,525

 
 
 
15,721

 
 

 

Multifamily
 
1,706

 
 
 
1,715

 
 

 

 
 
1,927

 
 
 
1,939

 
 

 

Total individually impaired loans with no related allowance recorded
 
20,629

 
 
 
18,127

 
 

 

 
 
20,452

 
 
 
17,660

 
 

 

Total individually impaired loans(6)
 
$
205,500

 
 
 
$
192,893

 
 
$
36,838

 
$
636

 
 
$
206,147

 
 
 
$
193,279

 
 
$
37,729

 
$
688



 
For the Three Months Ended March 31,
 
2014
 
2013
 
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)
 
$
123,465

 
 
 
$
1,094

 
 
 
$
140

 
 
 
$
125,968

 
 
 
$
1,102

 
 
 
$
173

 
Government(3)
 
238

 
 
 
3

 
 
 

 
 
 
208

 
 
 
3

 
 
 

 
Alt-A
 
34,337

 
 
 
270

 
 
 
28

 
 
 
35,534

 
 
 
277

 
 
 
39

 
Other(4)
 
14,910

 
 
 
103

 
 
 
11

 
 
 
15,984

 
 
 
109

 
 
 
14

 
Total single-family
 
172,950

 
 
 
1,470

 
 
 
179

 
 
 
177,694

 
 
 
1,491

 
 
 
226

 
Multifamily
 
2,086

 
 
 
23

 
 
 

 
 
 
2,607

 
 
 
31

 
 
 

 
Total individually impaired loans with related allowance recorded
 
175,036

 
 
 
1,493

 
 
 
179

 
 
 
180,301

 
 
 
1,522

 
 
 
226

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
With no related allowance recorded:(5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
Single-family:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
Primary(2)
 
12,646

 
 
 
185

 
 
 
48

 
 
 
10,830

 
 
 
641

 
 
 
59

 
Government(3)
 
93

 
 
 
1

 
 
 

 
 
 
109

 
 
 
2

 
 
 

 
Alt-A
 
2,520

 
 
 
41

 
 
 
10

 
 
 
2,078

 
 
 
175

 
 
 
10

 
Other(4)
 
891

 
 
 
11

 
 
 
2

 
 
 
662

 
 
 
63

 
 
 
5

 
Total single-family
 
16,150

 
 
 
238

 
 
 
60

 
 
 
13,679

 
 
 
881

 
 
 
74

 
Multifamily
 
1,826

 
 
 
20

 
 
 

 
 
 
1,686

 
 
 
22

 
 
 
1

 
 Total individually impaired loans with no related allowance recorded
 
17,976

 
 
 
258

 
 
 
60

 
 
 
15,365

 
 
 
903

 
 
 
75

 
Total individually impaired loans(6)
 
$
193,012

 
 
 
$
1,751

 
 
 
$
239

 
 
 
$
195,666

 
 
 
$
2,425

 
 
 
$
301

 
__________
(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 $187.9 billion and $187.6 billion as of March 31, 2014 and December 31, 2013, respectively. Includes multifamily loans restructured in a TDR with a recorded investment of $897 million and $911 million as of March 31, 2014 and December 31, 2013, respectively.
(7) 
Total single-family interest income recognized of $1.7 billion for the three months ended March 31, 2014 consists of $1.4 billion of contractual interest and $275 million of effective yield adjustments. Total single-family interest income recognized of $2.4 billion for the three months ended March 31, 2013 consists of $1.4 billion of contractual interest and $941 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 March 31, 2014 and 2013, the average term extension of a single-family modified loan was 159 months and 148 months, respectively, and the average interest rate reduction was 1.23 and 1.81 percentage points, respectively.
The following table displays the number of loans and recorded investment in loans restructured in a TDR for the three months ended March 31, 2014 and 2013.
 
For the Three Months Ended March 31,
 
2014
 
2013
 
Number of Loans
 
Recorded Investment(1)
 
Number of Loans
 
Recorded Investment(1)
 
(Dollars in millions)
Single-family:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Primary(2)
 
28,842

 
 
 
$
4,110

 
 
 
38,251

 
 
 
$
5,644

 
Government(3)
 
62

 
 
 
8

 
 
 
90

 
 
 
11

 
Alt-A
 
4,396

 
 
 
740

 
 
 
7,110

 
 
 
1,223

 
Other(4)
 
1,038

 
 
 
219

 
 
 
2,057

 
 
 
452

 
Total single-family
 
34,338

 
 
 
5,077

 
 
 
47,508

 
 
 
7,330

 
Multifamily
 
6

 
 
 
34

 
 
 
8

 
 
 
33

 
Total troubled debt restructurings
 
34,344

 
 
 
$
5,111

 
 
 
47,516

 
 
 
$
7,363

 
__________
(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 months ended March 31, 2014 and 2013 and were restructured 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 March 31,
 
2014
 
2013
 
Number of Loans
 
Recorded Investment(1)
 
Number of Loans
 
Recorded Investment(1)
 
(Dollars in millions)
Single-family:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Primary(2)
 
8,598

 
 
 
$
1,310

 
 
 
12,060

 
 
 
$
1,867

 
Government(3)
 
18

 
 
 
2

 
 
 
29

 
 
 
4

 
Alt-A
 
1,444

 
 
 
260

 
 
 
2,672

 
 
 
484

 
Other(4)
 
504

 
 
 
115

 
 
 
823

 
 
 
185

 
Total single-family
 
10,564

 
 
 
1,687

 
 
 
15,584

 
 
 
2,540

 
Multifamily
 
4

 
 
 
14

 
 
 
3

 
 
 
15

 
Total TDRs that subsequently defaulted
 
10,568

 
 
 
$
1,701

 
 
 
15,587

 
 
 
$
2,555

 
__________
(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.