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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
 
 
Notes to Condensed Consolidated Financial Statements | Concentrations of Credit Risk


We had outstanding receivables of $768 million recorded in “Other assets” in our condensed consolidated balance sheets as of September 30, 2018 and $858 million as of December 31, 2017 related to amounts claimed on insured, defaulted loans excluding government-insured loans. Of this amount, $42 million as of September 30, 2018 and $75 million as of December 31, 2017 was due from our mortgage servicers or sellers. We assessed the total outstanding receivables for collectibility, and they are recorded net of a valuation allowance of $567 million as of September 30, 2018 and $593 million as of December 31, 2017. The valuation allowance reduces our claim receivable to the amount considered probable of collection as of September 30, 2018 and December 31, 2017.
Mortgage Servicers and Sellers. Mortgage servicers collect mortgage and escrow payments from borrowers, pay taxes and insurance costs from escrow accounts, monitor and report delinquencies, and perform other required activities on our behalf. Our mortgage servicers and sellers may also be obligated to repurchase loans or foreclosed properties, reimburse us for losses or provide other remedies under certain circumstances, such as if it is determined that the mortgage loan did not meet our underwriting or eligibility requirements, if certain loan representations and warranties are violated or if mortgage insurers rescind coverage. However, under our revised representation and warranty framework, we no longer require repurchase for loans that have breaches of certain selling representations and warranties if they have met specified criteria for relief.
Our business with mortgage servicers is concentrated. The table below displays the percentage of our single-family guaranty book of business serviced by our top five depository single-family mortgage servicers and top five non-depository single-family mortgage servicers, and identifies one servicer that serviced more than 10% of our single-family guaranty book of business based on unpaid principal balance.
 
Percentage of Single-Family Guaranty Book of Business
 
As of
 
September 30, 2018
 
December 31, 2017
Wells Fargo Bank, N.A. (together with its affiliates)
18
%
 
18
%
Remaining top five depository servicers
16

 
17

Top five non-depository servicers
21

 
20

Total
55
%
 
55
%

The table below displays the percentage of our multifamily guaranty book of business serviced by our top five multifamily mortgage servicers, and identifies two servicers that serviced 10% or more of our multifamily guaranty book of business based on unpaid principal balance.
 
Percentage of Multifamily Guaranty Book of Business
 
As of
 
September 30, 2018
 
December 31, 2017
Wells Fargo Bank, N.A. (together with its affiliates)
14
%
 
14
%
Walker & Dunlop, LLC
12

 
12

Remaining top five servicers
22

 
22

Total
48
%
 
48
%
If a significant mortgage servicer or seller counterparty, or a number of mortgage servicers or sellers, fails to meet their obligations to us, it could adversely affect our results of operations and financial condition.
For information on credit risk associated with our derivative transactions and repurchase agreements see “Note 8, Derivative Instruments” and “Note 12, Netting Arrangements.”

Fannie Mae (In conservatorship) Third Quarter 2018 Form 10-Q
85