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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 05/07/2015
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(1) 
Calculated based on the number of single-family loans that were seriously delinquent for each category divided by the total number of single-family conventional loans that were seriously delinquent.
(2) 
Refers to loans included in an agreement used to reduce credit risk by requiring collateral, letters of credit, mortgage insurance, corporate guarantees, or other agreements to provide an entity with some assurance that it will be compensated to some degree in the event of a financial loss.
Loan Workout Metrics
Table 29 displays statistics on our single-family loan workouts that were completed, by type. These statistics include loan modifications but do not include trial modifications, loans to certain borrowers who have received bankruptcy relief that are classified as TDRs, or repayment or forbearance plans that have been initiated but not completed. As of March 31, 2015, there were approximately 40,400 loans in a trial modification period.
Table 29: Statistics on Single-Family Loan Workouts
 
 
For the Three Months Ended March 31,
 
 
 
 
2015
 
 
 
2014
 
 
 
Unpaid Principal Balance
 
Number of Loans
 
Unpaid Principal Balance
 
Number of Loans
 
 
 
(Dollars in millions)
 
 
Home retention strategies:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Modifications
 
$
4,415

 
 
 
26,700

 
 
 
$
6,191

 
 
 
36,044

 
 
Repayment plans and forbearances completed(1)
 
257

 
 
 
1,868

 
 
 
296

 
 
 
2,255

 
 
Total home retention strategies
 
4,672

 
 
 
28,568

 
 
 
6,487

 
 
 
38,299

 
 
Foreclosure alternatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short sales
 
758

 
 
 
3,689

 
 
 
1,374

 
 
 
6,804

 
 
Deeds-in-lieu of foreclosure
 
304

 
 
 
1,968

 
 
 
528

 
 
 
3,323

 
 
Total foreclosure alternatives
 
1,062

 
 
 
5,657

 
 
 
1,902

 
 
 
10,127

 
 
Total loan workouts
 
$
5,734

 
 
 
34,225

 
 
 
$
8,389

 
 
 
48,426

 
 
Loan workouts as a percentage of single-family guaranty book of business
 
0.81

%
 
0.79

%
 
1.17

%
 
1.10

%
__________
(1) 
Repayment plans reflect only those plans associated with loans that were 60 days or more delinquent. Forbearances reflect loans that were 90 days or more delinquent.
The volume of home retention solutions completed in the first quarter of 2015 decreased compared with the first quarter of 2014, primarily due to a decline in the number of delinquent loans in the first quarter of 2015, compared with the first quarter of 2014.
We continue to work with our servicers to implement our home retention and foreclosure prevention initiatives. Our approach to workouts continues to focus on the large number of borrowers facing financial hardships. Accordingly, the vast majority of loan modifications we have completed since 2009 have been concentrated on deferring or lowering the borrowers’ monthly mortgage payments to allow borrowers to work through their hardships.
Our loan modifications can include a reduction in the borrower’s interest rate that is fixed for an initial period and may be followed by one or more annual interest rate increases. The majority of these rate reset modifications are performing loans that were modified under HAMP and have fixed interest rates for an initial five-year period followed by annual interest rate increases, of up to one percent per year, until the mortgage rate reaches the prevailing market rate at the time of modification. The outstanding unpaid principal balance of rate reset modifications in our guaranty book of business was $86.5 billion as of March 31, 2015. During the first quarter of 2015, approximately 12% of these modified loans experienced an interest rate reset to a weighted average interest rate of 3.21%. In anticipation of potential financial hardship related to interest rate increases, we have directed servicers to evaluate rate reset modifications for a re-modification if the loan is at imminent risk of default and the borrower requests a loan modification or if the loan becomes 60 days delinquent within the first 12 months after an interest rate adjustment. Additionally, for borrowers with HAMP modifications we extended “pay for performance” incentives, in the form of principal curtailment, to encourage borrowers to stay current on their mortgages after the initial interest rate reset and to reduce their monthly payments in cases where the borrower chooses to re-amortize their unpaid

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