Fannie Mae earnings

[Housebroken13]

Very interesting stuff, and they've had 3 Board members leave in the last 3 or 4 months also.

Link to report is:

http://biz.yahoo.com/e/090806/fnm10-q.html

Table 1 below presents information about the credit performance of mortgage
loans in our single-family guaranty book of business for each quarter of 2008
and the first two quarters of 2009, illustrating the worsening trend in
performance throughout 2008 and continuing in the first half of 2009.

Table 1: Credit Statistics, Single-Family Guaranty Book of Business(1)


2009 2008
Q2 YTD Q2 Q1 Full Year Q4 Q3 Q2 Q1
(Dollars in millions)

As of the end of each period:
Serious delinquency rate(2) 3.94 % 3.94 % 3.15 % 2.42 % 2.42 % 1.72 % 1.36 % 1.15 %
On-balance sheet nonperforming
loans(3) $ 26,300 $ 26,300 $ 23,145 $ 20,484 $ 20,484 $ 14,148 $ 11,275 $ 10,947
Off-balance sheet nonperforming
loans(4) $ 144,183 $ 144,183 $ 121,378 $ 98,428 $ 98,428 $ 49,318 $ 34,765 $ 23,983
Combined loss reserves(5) $ 54,152 $ 54,152 $ 41,082 $ 24,649 $ 24,649 $ 15,528 $ 8,866 $ 5,140
Foreclosed property inventory (number
of properties)(6) 62,615 62,615 62,371 63,538 63,538 67,519 54,173 43,167
During the period:
Loan modifications (number of
loans)(7) 29,130 16,684 12,446 33,388 6,313 5,291 10,229 11,555
HomeSaver Advance problem loan
workouts (number of loans)(8) 32,093 11,662 20,431 70,967 25,788 27,278 16,749 1,152
Foreclosed property acquisitions
(number of properties)(9) 57,469 32,095 25,374 94,652 20,998 29,583 23,963 20,108
Single-family credit-related
expenses (10) $ 38,721 $ 18,391 $ 20,330 $ 29,725 $ 11,917 $ 9,215 $ 5,339 $ 3,254
Single-family credit losses(11) $ 5,766 $ 3,301 $ 2,465 $ 6,467 $ 2,197 $ 2,164 $ 1,249 $ 857

(1) The single-family guaranty book of business consists of single-family mortgage loans held in our mortgage portfolio, single-family Fannie Mae MBS held in our mortgage portfolio, single-family Fannie Mae MBS held by third parties, and other credit enhancements that we provide on single-family mortgage assets. It excludes non-Fannie Mae mortgage-related securities held in our investment portfolio for which we do not provide a guaranty.
(2) Calculated based on number of conventional single-family loans that are three or more months past due and loans that have been referred to foreclosure but not yet foreclosed upon, divided by the number of loans in our conventional single-family guaranty book of business. We include all of the conventional single-family loans that we own and those that back Fannie Mae MBS in the calculation of the single-family serious delinquency rate.
(3) Represents the total amount of nonaccrual loans, troubled debt restructurings, and first-lien loans associated with unsecured HomeSaver Advance loans including troubled debt restructurings and HomeSaver Advance first-lien loans on accrual status. A troubled debt restructuring is a restructuring of a mortgage loan in which a concession is granted to a borrower experiencing financial difficulty. Prior to the fourth quarter of 2008, we generally classified loans as nonperforming when the payment of principal or interest on the loan was three months or more past due. In the fourth quarter of 2008, we began classifying loans as nonperforming at an earlier stage in the delinquency cycle, generally when the payment of principal or interest on the loan is two months or more past due.
(4) Represents unpaid principal balance of nonperforming loans in our outstanding and unconsolidated Fannie Mae MBS held by third parties, including first-lien loans associated with unsecured HomeSaver Advance loans that are not seriously delinquent. Prior to the fourth quarter of 2008, we generally classified loans as nonperforming when the payment of principal or interest on the loan was three months or more past due. In the fourth quarter of 2008, we began classifying loans as nonperforming at an earlier stage in the delinquency cycle, generally when the payment of principal or interest on the loan is two months or more past due. Loans have been classified as nonperforming according to the classification standard in effect at the time the loan became a nonperforming loan, and prior periods have not been revised to reflect changes in classification.
(5) Consists of the allowance for loan losses for loans held for investment in our mortgage portfolio and reserve for guaranty losses related to both loans backing Fannie Mae MBS and loans that we have guaranteed under long-term standby commitments.

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(6) Reflects the number of single-family foreclosed properties we held in inventory as of the end of each period. Includes properties we acquired through deeds in lieu of foreclosure.
(7) Modifications are granted for borrowers experiencing financial difficulty and include troubled debt restructurings as well as other modifications to the terms of the loan. A troubled debt restructuring of a mortgage loan is a restructuring in which a concession is granted to the borrower. It is the only form of modification in which we agree to accept less than the full original contractual principal and interest amount due under the loan, although other resolutions and modifications may result in our receiving the full amount due, or certain installments due, under the loan over a period of time that is longer than the period of time originally provided for under the terms of the loans.
(8) Represents number of first-lien loans associated with unsecured HomeSaver Advance loans.
(9) Includes deeds in lieu of foreclosure.
(10) Consists of the provision for credit losses and foreclosed property expense.
(11) Consists of (a) charge-offs, net of recoveries and (b) foreclosed property expense; adjusted to exclude the impact of SOP 03-3 and HomeSaver Advance fair value losses for the reporting period. Interest forgone on single-family nonperforming loans in our mortgage portfolio is not reflected in our credit losses total. In addition, we exclude other-than-temporary impairment losses resulting from deterioration in the credit quality of our mortgage-related securities and accretion of interest income on single-family loans subject to Statement of Position No. 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer ("SOP 03-3"), from credit losses. See "Consolidated Results of Operations-Credit-Related Expenses-Provision Attributable to SOP 03-3 and HomeSaver Advance Fair Value Losses" for a discussion of SOP 03-3.