|FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 05/07/2015|
The amount of our benefit or provision for credit losses varies from period to period based on changes in actual and expected
home prices, borrower payment behavior, the types and volumes of loss mitigation activities and foreclosures completed, and
actual and estimated recoveries from our mortgage insurer counterparties. See “Risk Management—Credit Risk Management—Institutional Counterparty Credit Risk Management” for information on mortgage insurers. In addition, our benefit or provision for credit losses and our loss reserves can be impacted by updates to the models, assumptions and data used in determining our allowance for loan losses.
We recognized a benefit for credit losses in the first quarter of 2015 primarily due to an increase in actual and forecasted home prices, a decline in actual and projected interest rates and the liquidation of mortgage loans. Our approach to the adoption of the charge-off provisions of the Advisory Bulletin on January 1, 2015 had no impact on the amount of benefit for credit losses that we recognized in the first quarter of 2015.
We recognized a benefit for credit losses in the first quarter of 2014 primarily due to a decline in mortgage interest rates as well as an increase in home prices.
We discuss our expectations regarding our future loss reserves in “Executive Summary—Outlook—Loss Reserves.”