March 01, 2010Fannie Mae to Purchase Delinquent Loans from Single-Family MBS Trusts - Additional Information
WASHINGTON, DC – On February 10, 2010, Fannie Mae (FNM/NYSE) announced that it intends to increase significantly its purchases of loans from single-family MBS trusts that are delinquent as to four or more consecutive monthly payments.
As noted in the February 10th announcement, the total dollar volume (measured by scheduled unpaid principal balance) of all loans that were four or more months delinquent in our single-family MBS as of December 31, 2009 was approximately $127 billion. Of that amount, approximately $82 billion backed our CL prefix MBS and approximately $45 billion backed our non-CL prefix MBS.
The attached chart provides information regarding delinquent loans backing our CL prefix MBS and our non-CL prefix MBS. The information is categorized by MBS pass-through rates with corresponding product type and vintage information (year of MBS issuance). The chart shows both the total scheduled unpaid principal balances of loans that were four or more months delinquent as of December 31, 2009 and those balances as a percentage of total scheduled unpaid principal balances of all loans in the related MBS as of that date. The disclosure includes seven categories of fixed-rate mortgage loan product (organized by MBS prefix), two categories of adjustable-rate mortgage loan product, and an additional category (designated as "other") that includes all remaining loan products.
We anticipate that we will purchase approximately 150,000 — 200,000 loans from MBS trusts in the month of March, and expect that we will continue purchasing loans in each of the subsequent few months until we have substantially reduced the current population of loans that are four or more months delinquent. March 2010 purchases of loans that are four or more months delinquent will be reflected in the MBS pool factors released on the fourth business day of April 2010. Loans that become four or more months delinquent after December 31, 2009 will be included in the purchase population as they become eligible.
Generally, when determining which loans to purchase, priority will be given to mandatory purchases (such as modified loans and loans that become 24 months delinquent), loans in MBS having the highest MBS pass-through rates, loans backing CL or CI prefixes, and lastly, loans having the highest unpaid principal balances. To enhance visibility of purchase activity for security holders, Fannie Mae plans to provide monthly updates of the table through the end of 2010. This table will be available on www.fanniemae.com on the fourth business day of the month (coinciding with the publication of monthly MBS pool factors) and will reflect loans that were four or more months delinquent as of the date specified in that month's table heading.
Investors should consult our June 1, 2009 MBS Prospectus for additional information regarding our trust agreement provisions and servicing practices regarding troubled loans, including purchases of delinquent loans from MBS trusts.
Certain statements in this announcement may be considered forward-looking statements within the meaning of the federal securities laws, including statements about our plans to purchase loans from trusts. Factors that may cause actual results to differ materially from the expectations in these and other forward-looking statements include servicer capacity issues as well as those discussed in our Annual Report on Form 10-K for the year ended December 31, 2009 and our reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investors page of our Web site at www.fanniemae.com and the SEC's Web site at www.sec.gov.