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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


The increase in home retention solutions in the first nine months of 2018 compared with the first nine months of 2017 was primarily driven by modifications and forbearances granted during the first nine months of 2018 to borrowers in areas affected by the 2017 hurricanes.
REO Management
If a loan defaults, we acquire the home through foreclosure or a deed-in-lieu of foreclosure. The table below displays our foreclosure activity by region. Regional REO acquisition trends generally follow a pattern that is similar to, but lags, that of regional delinquency trends.
Single-Family REO Properties
 
For the Nine Months
 
Ended September 30,
 
2018
 
2017
Single-family REO properties (number of properties):
 
 
 
 
 
Beginning of period inventory of single-family REO properties(1)
26,311

 
 
38,093

 
Acquisitions by geographic area:(2)
 
 
 
 
 
Midwest
4,675

 
 
6,716

 
Northeast
5,023

 
 
7,496

 
Southeast
6,190

 
 
8,966

 
Southwest
2,864

 
 
4,083

 
West
1,518

 
 
2,156

 
Total REO acquisitions(1)
20,270

 
 
29,417

 
Dispositions of REO
(25,549
)
 
 
(38,497
)
 
End of period inventory of single-family REO properties(1)
21,032

 
 
29,013

 
Carrying value of single-family REO properties (dollars in millions)
$
2,606

 
 
$
3,448

 
Single-family foreclosure rate(3)
0.16

%
 
0.23

%
REO net sales prices to unpaid principal balance(4)
77

%
 
75

%
Short sales net sales prices to unpaid principal balance(5)
77

%
 
75

%
__________
(1) 
Includes acquisitions through foreclosure and deeds-in-lieu of foreclosure. Also includes held for use properties, which are reported in our condensed consolidated balance sheets as a component of “Other assets.”
(2) 
See footnote 7 to the Risk Characteristics of Single-Family Conventional Business Volume and Guaranty Book of Business table for states included in each geographic region.
(3) 
Estimated based on the annualized total number of properties acquired through foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of loans in our single-family guaranty book of business as of the end of each respective period.
(4) 
Calculated as the amount of sale proceeds received on disposition of REO properties during the respective periods, excluding those subject to repurchase requests made to our sellers or servicers, divided by the aggregate unpaid principal balance of the related loans at the time of foreclosure. Net sales price represents the contract sales price less selling costs for the property and other charges paid by the seller at closing.
(5) 
Calculated as the amount of sale proceeds received on properties sold in short sale transactions during the respective periods divided by the aggregate unpaid principal balance of the related loans. Net sales price represents the contract sales price less the selling costs for the property and other charges paid by the seller at the closing, including borrower relocation incentive payments and subordinate lien(s) negotiated payoffs.
The decrease in single-family REO properties from December 31, 2017 to September 30, 2018 was primarily due to a reduction in REO acquisitions from serious delinquencies aged greater than 180 days driven by improved loan performance and the continued sale of nonperforming loans in 2018.

Fannie Mae Third Quarter 2018 Form 10-Q
34