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SEC Filings

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Our approach to workouts continues to address the large number of borrowers facing long-term, rather than short-term, financial hardships due to prolonged economic stress and high levels of unemployment. Accordingly, the vast majority of loan modifications we completed during the first quarter of 2011 were, as in recent periods, concentrated on lowering or deferring the borrowers’ monthly mortgage payments for a predetermined period of time to allow borrowers to work through their hardships.
In addition, we continue to focus on alternatives to foreclosure for borrowers who are unable to retain their homes. Our servicers work with a borrower to sell their home prior to foreclosure in a preforeclosure sale or accept a deed-in-lieu of foreclosure whereby the borrower voluntarily signs over the title to their property to the servicer. These alternatives are designed to reduce our credit losses while helping borrowers avoid having to go through a foreclosure. Further, in cooperation with several Multiple Listing Services (“MLS”) across the nation, we developed the Short Sale Assistance Desk (“Assistance Desk”) to assist real estate professionals in handling post-offer short sale issues that may relate to servicer responsiveness, the existence of a second lien, or issues involving mortgage insurance. The Assistance Desk leverages the relationship between the participating MLSs and their members to collect and submit information to us using a dedicated submission form on the MLS website. Complementing this streamlined service, the participating MLS provides us with data to help improve valuations and make quicker decisions regarding short sale requests. The Assistance Desk is meant to serve as a catalyst for progress towards a resolution for the homeowner.
Table 38 provides statistics on our single-family loan workouts that were completed, by type, for the periods indicated. These statistics include loan modifications but do not include trial modifications or repayment and forbearance plans that have been initiated but not completed.
Table 38:  Statistics on Single-Family Loan Workouts
    For the
    For The
    For the
    Three Months Ended
    Year Ended
    Three Months Ended
    March 31, 2011     December 31, 2010     March 31, 2010  
    Balance     of Loans     Balance     of Loans     Balance     of Loans  
                (Dollars in millions)              
Home retention strategies:
  $ 10,668       51,043     $ 82,826       403,506     $ 19,005       93,756  
Repayment plans and forbearances completed
    1,374       9,916       4,385       31,579       1,137       8,682  
HomeSaver Advance first-lien loans
                688       5,191       178       2,588  
    $ 12,042       60,959     $ 87,899       440,276     $ 20,320       105,026  
Foreclosure alternatives:
Preforeclosure sales
  $ 3,415       15,344     $ 15,899       69,634     $ 3,817       16,457  
Deeds-in-lieu of foreclosure
    318       1,776       1,053       5,757       158       869  
    $ 3,733       17,120     $ 16,952       75,391     $ 3,975       17,326  
Total loan workouts
  $ 15,775       78,079     $ 104,851       515,667     $ 24,295       122,352  
Loan workouts as a percentage of single-family guaranty book of business(1)
    2.18 %     1.73 %     3.66 %     2.87 %     3.38 %     2.68 %
(1) Calculated based on annualized loan workouts during the period as a percentage of our single-family guaranty book of business as of the end of the period.
The volume of workouts completed in the first quarter of 2011 decreased compared with the first quarter of 2010, in part because we began to require that certain non-HAMP modifications go through a trial period, which lowered the number of modifications that became permanent. The number of foreclosure alternatives we agreed to during the first quarter of 2011 remains high as these are favorable solutions for a growing number of borrowers. We expect the volume of our foreclosure alternatives to remain high throughout the remainder of 2011.