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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 11/02/2018
Entire Document
 
 
MD&A | Business Segments


Single-Family Problem Loan Management
Our problem loan management strategies are primarily focused on reducing defaults to avoid losses that would otherwise occur and pursuing foreclosure alternatives to attempt to minimize the severity of the losses we incur. See “MD&A—Business Segments—Single-Family Business—Single-Family Mortgage Credit Risk Management—Problem Loan Management” in our 2017 Form 10-K for a discussion of delinquency statistics on our problem loans, efforts undertaken to manage our problem loans, metrics regarding our loan workout activities, real estate owned (“REO”) management and other single-family credit-related disclosures. The discussion below updates some of that information.
Delinquency
The tables below display the delinquency status of loans and changes in the balance of seriously delinquent loans in our single-family conventional guaranty book of business, based on the number of loans. We include single-family conventional loans that we own and those that back Fannie Mae MBS in the calculation of the single-family delinquency rate. Seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process.
Delinquency Status and Activity of Single-Family Conventional Loans
 
As of
 
September 30, 2018
 
December 31, 2017
 
September 30,
2017
Delinquency status:
 
 
 
 
 
30 to 59 days delinquent
1.52
%
 
1.63
%
 
1.63
%
60 to 89 days delinquent
0.37

 
0.50

 
0.40

Seriously delinquent (“SDQ”)
0.82

 
1.24

 
1.01

Percentage of SDQ loans that have been delinquent for more than 180 days
53
%
 
43
%
 
57
%
Percentage of SDQ loans that have been delinquent for more than two years
13

 
13

 
18

 
For the Nine Months Ended September 30,
 
2018
 
2017
Single-family SDQ loans (number of loans):
 
 
 
Beginning balance
212,183

 
206,549

Additions
171,516

 
177,449

Removals:
 
 
 
Modifications and other loan workouts
(83,567
)
 
(56,048
)
Liquidations and sales
(58,912
)
 
(63,854
)
Cured or less than 90 days delinquent
(101,524
)
 
(91,545
)
Total removals
(244,003
)
 
(211,447
)
Ending balance
139,696

 
172,551

Our single-family serious delinquency rate was 0.82% as of September 30, 2018, compared with 1.24% as of December 31, 2017 and 1.01% as of September 30, 2017. Our single-family serious delinquency rate increased in the latter part of 2017 due to the impact of the 2017 hurricanes, but has since resumed its prior downward trend because many delinquent borrowers in the affected areas have resolved their loan delinquencies by obtaining loan modifications or through resuming payments and becoming current on their loans. Our single-family serious delinquency rate may be negatively impacted in the near term as a result of the hurricanes that occurred late in the third quarter of 2018 and early in the fourth quarter of 2018, which may cause some borrowers in the affected regions to miss their payments, including through forbearance arrangements that may be extended. We are still evaluating the impact, but we do not believe that the hurricanes to date in 2018, individually or in aggregate, will have a material impact on our credit losses or loss reserves. In the longer term, we expect our single-family

Fannie Mae Third Quarter 2018 Form 10-Q
31