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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 08/05/2011
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Table of Contents

FANNIE MAE
(In conservatorship)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(UNAUDITED)
 
 
(5) Total single-family allowance for loan losses was $59.0 billion as of June 30, 2010. Total multifamily allowance for loan losses was $1.6 billion as of June 30, 2010.
 
As of June 30, 2011, the allowance for accrued interest receivable for loans of Fannie Mae was $2.6 billion and for loans of consolidated trusts was $442 million. As of December 31, 2010, the allowance for accrued interest receivable for loans of Fannie Mae was $3.0 billion and for loans of consolidated trusts was $439 million.
 
In the three month period ended June 30, 2010, we identified that for a portion of our delinquent loans we had not estimated and recorded our obligation to reimburse servicers for advances they made on our behalf for preforeclosure property taxes and insurance. We previously recognized these expenses when we reimbursed servicers. We also did not record a receivable from borrowers for these payments or assess the collectibility of the receivable. As such, we did not record an allowance for estimated uncollectable amounts. To correct the above misstatement, we recorded an out-of-period adjustment of $1.1 billion to “Provision for loan losses” in our condensed consolidated statements of operations for the three and six month periods ended June 30, 2010, reflecting our assessment of the collectibility of the receivable from the borrowers. We evaluated the effects of this misstatement, both quantitatively and qualitatively, on our three and six month periods ended June 30, 2010 and prior consolidated financial statements and concluded that no prior periods are materially misstated.
 
The following table displays the allowance for loan losses and total recorded investment in our HFI loans, excluding loans for which we have elected the fair value option, by impairment or reserve methodology and portfolio segment as of June 30, 2011 and December 31, 2010.
 
                                                 
    As of  
    June 30, 2011     December 31, 2010  
    Single-
                Single-
             
    Family     Multifamily     Total     Family     Multifamily     Total  
    (Dollars in millions)  
 
Allowance for loan losses by segment:
                                               
Individually impaired loans
  $ 43,803     $ 518     $ 44,321     $ 37,296     $ 549     $ 37,845  
Collectively reserved loans
    23,815       956       24,771       22,306       1,020       23,326  
Acquired credit-impaired loans
    409       5       414       378       7       385  
                                                 
Total allowance for loan losses
  $ 68,027     $ 1,479     $ 69,506     $ 59,980     $ 1,576     $ 61,556  
                                                 
Recorded investment in loans by segment:(1)
                                               
Individually impaired loans
  $ 149,813     $ 2,770     $ 152,583     $ 140,062     $ 3,074     $ 143,136  
Collectively reserved loans
    2,678,465       171,961       2,850,426       2,677,640       169,332       2,846,972  
Acquired credit-impaired loans
    3,938       67       4,005       4,798       108       4,906  
                                                 
Total recorded investment in loans
  $ 2,832,216     $ 174,798     $ 3,007,014     $ 2,822,500     $ 172,514     $ 2,995,014  
                                                 
 
 
(1) Recorded investment consists of the following: (a) unpaid principal balance; (b) unamortized premiums, discounts and other cost basis adjustments; and (c) accrued interest receivable.


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