|
|
 | | | |
- close
- close
- close
- close
| |||||||||
This excerpt taken from the PNC 10-Q filed Nov 8, 2007. Recourse Agreement with Federal National Mortgage Association In connection with our July 2007 acquisition of ARCS, we are authorized to originate, underwrite, close and service commercial mortgage loans and then sell them to Fannie Mae under Fannie Mae’s DUS program. Under this program, we assume one-third of the risk of loss on unpaid principal balances. Accordingly, we maintain a reserve for such potential losses which approximates the fair value of this liability. At September 30, 2007, the unpaid principal balance outstanding of loans sold by ARCS as a participant in this program was $11.6 billion. The fair value of the guarantee, in the form of reserves for losses under this program, totaled $40 million as of September 30, 2007 and is included in Other liabilities on our Consolidated Balance Sheet. If payment is required under this program, we would not have an interest in the collateral underlying the mortgage loans on which losses occurred. The serviced loans are not included on our Consolidated Balance Sheet.
67
Table of Contents |
| |||||||
