Mortgage Loans

12 Months Ended

Dec. 31, 2014

Mortgage Loans on Real Estate [Abstract]

We own both single-family mortgage loans, which are secured by four or fewer residential dwelling units, and multifamily mortgage loans, which are secured by five or more residential dwelling units. We classify these loans as either HFI or HFS. We report the carrying value of HFI loans at the unpaid principal balance, net of unamortized premiums and discounts, other cost basis adjustments, and an allowance for loan losses. We report the carrying value of HFS loans at the lower of cost or fair value determined on a pooled basis, and record valuation changes in our consolidated statements of operations and comprehensive income. We report the recorded investment of HFI loans at the unpaid principal balance, net of unamortized premiums and discounts, other cost basis adjustments, and accrued interest receivable.

For purposes of the single-family mortgage loan disclosures below, we define “primary” class as mortgage loans that are not included in other loan classes; “government” class as 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; and “other” class as 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 carrying value of our mortgage loans as of December 31, 2014 and 2013.



	As of December 31,
	2014												2013
	Of Fannie Mae				Of Consolidated Trusts				Total				Of Fannie Mae				Of Consolidated Trusts				Total
	(Dollars in millions)
Single-family		$	262,116			$	2,569,884			$	2,832,000			$	276,644			$	2,579,024			$	2,855,668
Multifamily		23,255				164,045				187,300				37,642				146,249				183,891
Total unpaid principal balance of mortgage loans		285,371				2,733,929				3,019,300				314,286				2,725,273				3,039,559
Cost basis and fair value adjustments, net		(12,705		)		48,440				35,735				(13,778		)		44,305				30,527
Allowance for loan losses for loans held for investment		(33,117		)		(2,424		)		(35,541		)		(40,521		)		(3,325		)		(43,846		)
Total mortgage loans		$	239,549			$	2,779,945			$	3,019,494			$	259,987			$	2,766,253			$	3,026,240

For the year ended December 31, 2014, we redesignated loans with a carrying value of $285 million from HFS to HFI. For the years ended December 31, 2014, 2013 and 2012, we redesignated loans with a carrying value of $2.2 billion, $1.3 billion and $33 million, respectively, from HFI to HFS. We sold loans with an unpaid principal balance of $1.9 billion and $1.2 billion, respectively, during the years ended December 31, 2014 and 2013.

Aging Analysis

The following tables display an aging analysis of the total recorded investment in our HFI mortgage loans by portfolio segment and class as of December 31, 2014 and 2013, excluding loans for which we have elected the fair value option.



	As of December 31, 2014
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽¹⁾			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		$	29,130		$	8,396		$	38,248		$	75,774	$	2,580,446	$	2,656,220		$	55	$	46,556
Government⁽²⁾		63			26			305			394		44,927		45,321			305		—
Alt-A		4,094			1,414			11,603			17,111		95,650		112,761			8		13,007
Other		1,520			516			3,763			5,799		38,460		44,259			6		4,259
Total single-family		34,807			10,352			53,919			99,078		2,759,483		2,858,561			374		63,822
Multifamily⁽³⁾		60			N/A			89			149		189,084		189,233			—		823
Total		$	34,867		$	10,352		$	54,008		$	99,227	$	2,948,567	$	3,047,794		$	374	$	64,645



	As of December 31, 2013
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽¹⁾			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		$	32,371		$	9,755		$	48,345		$	90,471	$	2,558,826	$	2,649,297		$	81	$	57,973
Government⁽²⁾		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		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⁽³⁾		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⁾	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.


⁽²⁾	Primarily consists of reverse mortgages, which due to their nature, are not aged and are included in the current column.


⁽³⁾	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 by class and credit quality indicator as of December 31, 2014 and 2013, excluding loans for which we have elected the fair value option. The single-family credit quality indicator is based on available data through the end of each period presented.



	As of December 31,
	2014⁽¹⁾							2013⁽¹⁾
	Primary		Alt-A		Other			Primary		Alt-A		Other
	(Dollars in millions)
Estimated mark-to-market LTV ratio:⁽²⁾
Less than or equal to 80%	$	2,156,165	$	60,851		$	22,558	$	2,073,079	$	61,670		$	24,112
Greater than 80%and less than or equal to 90%	261,709		15,151			6,046		276,011		16,794			6,947
Greater than 90%and less than or equal to 100%	140,778		12,490			5,236		153,474		14,709			6,402
Greater than 100%and less than or equal to 110%	43,014		8,998			3,900		59,630		11,006			5,146
Greater than 110% and less than or equal to 120%	23,439		6,033			2,615		33,954		7,742			3,691
Greater than 120% and less than or equal to 125%	7,529		2,114			904		11,256		2,951			1,406
Greater than 125%	23,586		7,124			3,000		41,893		12,637			5,587
Total	$	2,656,220	$	112,761		$	44,259	$	2,649,297	$	127,509		$	53,291

__________


⁽¹⁾	Excludes $45.3 billion and $48.6 billion as of December 31, 2014 and 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.


⁽²⁾	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 by credit quality indicator as of December 31, 2014 and 2013, excluding loans for which we have elected the fair value option. The multifamily credit quality indicator is based on available data through the end of each period presented.



	As of December 31,
	2014			2013
	(Dollars in millions)
Credit risk profile by internally assigned grade:⁽¹⁾
Pass		$	182,079	$	176,528
Special Mention		3,070		2,234
Substandard		3,842		6,758
Doubtful		242		458
Total		$	189,233	$	185,978

__________

⁽¹⁾

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 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 December 31, 2014 and 2013, and average recorded investment and interest income recognized for the years ended December 31, 2014, 2013 and 2012 for individually impaired loans.



	As of December 31,
	2014										2013
	Unpaid Principal Balance			Total Recorded Investment			Related Allowance for Loan Losses		Related Allowance for Accrued Interest Receivable		Unpaid Principal Balance			Total Recorded Investment			Related Allowance for Loan Losses		Related Allowance for Accrued Interest Receivable
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary		$	125,960		$	120,221	$	20,327	$	309		$	130,080		$	123,631	$	24,145	$	430
Government		281			285		46		12			213			210		35		5
Alt-A		35,492			32,816		7,778		136			37,356			34,479		9,364		187
Other		14,667			13,947		3,049		38			15,789			15,023		3,879		56
Total single-family		176,400			167,269		31,200		495			183,438			173,343		37,423		678
Multifamily		1,230			1,241		175		6			2,257			2,276		306		10
Total individually impaired loans with related allowance recorded		177,630			168,510		31,375		501			185,695			175,619		37,729		688

With no related allowance recorded:⁽¹⁾
Single-family:
Primary		16,704			14,876		—		—			14,076			12,305		—		—
Government		61			57		—		—			120			120		—		—
Alt-A		3,993			3,119		—		—			3,290			2,428		—		—
Other		1,240			1,056		—		—			1,039			868		—		—
Total single-family		21,998			19,108		—		—			18,525			15,721		—		—
Multifamily		565			568		—		—			1,927			1,939		—		—
Total individually impaired loans with no related allowance recorded		22,563			19,676		—		—			20,452			17,660		—		—
Total individually impaired loans⁽²⁾		$	200,193		$	188,186	$	31,375	$	501		$	206,147		$	193,279	$	37,729	$	688



	For the Year Ended December 31,
	2014									2013									2012
	Average Recorded Investment			Total Interest Income Recognized⁽³⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽³⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽³⁾			Interest Income Recognized on a Cash Basis
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary		$	121,926		$	4,321		$	494		$	124,659		$	4,351		$	603		$	115,767		$	4,077		$	654
Government		270			13			—			213			11			—			216			11			—
Alt-A		33,676			1,066			100			35,075			1,096			135			32,978			1,048			151
Other		14,490			402			36			15,537			425			52			15,593			444			65
Total single-family		170,362			5,802			630			175,484			5,883			790			164,554			5,580			870
Multifamily		1,699			80			1			2,552			128			1			2,535			125			2
Total individually impaired loans with related allowance recorded		172,061			5,882			631			178,036			6,011			791			167,089			5,705			872

With no related allowance recorded:⁽¹⁾
Single-family:
Primary		13,852			864			215			11,442			1,369			227			8,264			1,075			231
Government		67			5			—			112			8			—			78			7			—
Alt-A		2,799			189			47			2,207			329			45			1,811			253			55
Other		974			56			12			752			117			17			455			95			24
Total single-family		17,692			1,114			274			14,513			1,823			289			10,608			1,430			310
Multifamily		1,472			64			—			1,863			97			3			1,781			56			2
Total individually impaired loans with no related allowance recorded		19,164			1,178			274			16,376			1,920			292			12,389			1,486			312
Total individually impaired loans⁽²⁾		$	191,225		$	7,060		$	905		$	194,412		$	7,931		$	1,083		$	179,478		$	7,191		$	1,184

__________


⁽¹⁾	The discounted cash flows or collateral value equals or exceeds the carrying value of the loan and, as such, no valuation allowance is required.


⁽²⁾	Includes single-family loans restructured in a TDR with a recorded investment of $185.2 billion, $187.6 billion and $193.4 billion as of December 31, 2014, 2013 and 2012, respectively. Includes multifamily loans restructured in a TDR with a recorded investment of $716 million, $911 million and $1.1 billion as of December 31, 2014, 2013 and 2012, respectively.

⁽³⁾

Total single-family interest income recognized of $6.9 billion for the year ended December 31, 2014, consists of $5.8 billion of contractual interest and $1.1 billion of effective yield adjustments. Total single-family interest income recognized of $7.7 billion for the year ended December 31, 2013, consists of $5.7 billion of contractual interest and $2.0 billion of effective yield adjustments. Total single-family interest income recognized of $7.0 billion for the year ended December 31, 2012, consists of $5.3 billion of contractual interest and $1.7 billion 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 loans to certain borrowers who have received bankruptcy relief as TDRs.

The substantial majority of the loan modifications we complete result in term extensions, interest rate reductions or a combination of both. During the years ended December 31, 2014 and 2013, the average term extension of a single-family modified loan was 161 months and 154 months, respectively, and the average interest rate reduction was 0.99 and 1.68 percentage points, respectively.

The following table displays the number of loans and recorded investment in loans restructured in a TDR for the years ended December 31, 2014 and 2013.



	For the Year Ended December 31,
	2014					2013
	Number of Loans		RecordedInvestment			Number of Loans		RecordedInvestment
	(Dollars in millions)
Single-family:
Primary		100,956		$	14,301		126,998		$	19,016
Government		365		47			312		35
Alt-A		14,715		2,441			21,471		3,794
Other		3,357		686			6,226		1,378
Total single-family		119,393		17,475			155,007		24,223
Multifamily		19		853			33		213
Total troubled debt restructurings		119,412		$	18,328		155,040		$	24,436

The following table displays the number of loans and our recorded investment in these loans at the time of payment default for the years ended December 31, 2014 and 2013 for loans that 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 Year Ended December 31,
	2014					2013
	Number of Loans		RecordedInvestment			Number of Loans		RecordedInvestment
	(Dollars in millions)
Single-family:
Primary		33,853		$	5,095		45,539		$	6,978
Government		124		15			130		17
Alt-A		5,392		960			9,601		1,732
Other		1,738		387			3,093		685
Total single-family		41,107		6,457			58,363		9,412
Multifamily		9		42			9		64
Total TDRs that subsequently defaulted		41,116		$	6,499		58,372		$	9,476