Mortgage Banking Activities (Tables)

12 Months Ended

Dec. 31, 2011



					Year ended December 31,
(in millions)					2011	2010	2009
Fair value, beginning of year				$	14,467	16,004	14,714
	Adjustments from adoption of consolidation accounting guidance				-	(118)	-
	Acquired from Wachovia (1)				-	-	34
	Servicing from securitizations or asset transfers				3,957	4,092	6,226
		Net additions			3,957	3,974	6,260
	Changes in fair value:
		Due to changes in valuation model inputs or assumptions (2)			(3,680)	(2,957)	(1,534)
		Other changes in fair value (3)			(2,141)	(2,554)	(3,436)
			Total changes in fair value		(5,821)	(5,511)	(4,970)
Fair value, end of year				$	12,603	14,467	16,004

The 2009 amount reflects refinements to initial December 31, 2008, Wachovia purchase accounting adjustments.
Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates, and costs to service, including delinquency and foreclosure costs.
Represents changes due to collection/realization of expected cash flows over time.



			Year ended December 31,
(in millions)			2011	2010	2009
Balance, beginning of year		$	1,422	1,119	1,446
	Adjustments from adoption of consolidation accounting guidance		-	(5)	-
	Purchases		155	58	11
	Acquired from Wachovia (1)		-	-	(135)
	Servicing from securitizations or asset transfers		132	478	61
	Amortization		(264)	(228)	(264)
Balance, end of year (2)			1,445	1,422	1,119
Valuation allowance:
Balance, beginning of year			(3)	-	-
	Provision for MSRs in excess of fair value		(34)	(3)	-
Balance, end of year (3)			(37)	(3)	-
Amortized MSRs, net		$	1,408	1,419	1,119
Fair value of amortized MSRs:
	Beginning of year	$	1,812	1,261	1,555
	End of year (4)		1,756	1,812	1,261

The 2009 amount reflects refinements to initial December 31, 2008, Wachovia purchase accounting adjustments.
Includes $350 million and $400 million in residential amortized MSRs at December 31, 2011 and 2010, respectively. The 2009 balance is all commercial amortized MSRs. For the years ended December 31, 2011 and 2010, the residential MSR amortization was $(50) million and $(5) million, respectively. Effective January 1, 2012, the amortized residential MSR portfolio will be transferred to MSRs carried at fair value.
Commercial amortized MSRs are evaluated for impairment purposes by the following risk strata: agency (GSEs) and non-agency. There was no valuation allowance recorded for the periods presented on the commercial amortized MSRs. Residential amortized MSRs are evaluated for impairment purposes by the following risk strata: Mortgages sold to GSEs (FHLMC and FNMA) and mortgages sold to GNMA, each by interest rate stratifications. A valuation allowance of $37 million and $3 million was recorded on the residential amortized MSRs for the years ended December 31, 2011 and 2010, respectively.
Includes fair value of $316 million and $441 million in residential amortized MSRs and $1,440 million and $1,371 million in commercial amortized MSRs at December 31, 2011 and 2010, respectively.



					December 31,
(in billions)					2011		2010
Residential mortgage servicing:
	Serviced for others			$	1,456		1,429
	Owned loans serviced				358		371
	Subservicing				8		9
		Total residential servicing			1,822		1,809
Commercial mortgage servicing:
	Serviced for others				398		408
	Owned loans serviced				106		99
	Subservicing				14		13
		Total commercial servicing			518		520
			Total managed servicing portfolio	$	2,340		2,329
Total serviced for others				$	1,854		1,837
Ratio of MSRs to related loans serviced for others					0.76	%	0.86



							Year ended December 31,
(in millions)							2011	2010	2009
Servicing income, net:
	Servicing fees:
		Contractually specified servicing fees				$	4,611	4,566	4,473
		Late charges					298	360	330
		Ancillary fees					354	434	287
		Unreimbursed direct servicing costs (1)					(1,119)	(763)	(914)
			Net servicing fees				4,144	4,597	4,176
	Changes in fair value of MSRs carried at fair value:
		Due to changes in valuation model inputs or assumptions (2)					(3,680)	(2,957)	(1,534)
		Other changes in fair value (3)					(2,141)	(2,554)	(3,436)
			Total changes in fair value of MSRs carried at fair value				(5,821)	(5,511)	(4,970)
	Amortization						(264)	(228)	(264)
	Provision for MSRs in excess of fair value						(34)	(3)	-
	Net derivative gains from economic hedges (4)						5,241	4,485	6,849
				Total servicing income, net			3,266	3,340	5,791
Net gains on mortgage loan origination/sales activities							4,566	6,397	6,237
					Total mortgage banking noninterest income	$	7,832	9,737	12,028
Market-related valuation changes to MSRs, net of hedge results (2) + (4)						$	1,561	1,528	5,315

Primarily associated with foreclosure expenses and other interest costs.
Principally reflects changes in discount rates and prepayment speed assumptions, mostly due to changes in interest rates and costs to service, including delinquency and foreclosure costs.
Represents changes due to collection/realization of expected cash flows over time.
Represents results from free-standing derivatives (economic hedges) used to hedge the risk of changes in fair value of MSRs. See Note 16 – Free-Standing Derivatives for additional discussion and detail.



				Year ended December 31,
(in millions)					2011	2010	2009
Balance, beginning of year				$	1,289	1,033	589
	Wachovia acquisition (1)				-	-	31
	Provision for repurchase losses:
		Loan sales			101	144	302
		Change in estimate (2)			1,184	1,474	625
			Total additions		1,285	1,618	958
	Losses				(1,248)	(1,362)	(514)
Balance, end of year				$	1,326	1,289	1,033

The 2009 amount is refinement to initial December 31, 2008, Wachovia purchase accounting adjustments.
Results from such factors as credit deterioration, changes in investor demand and mortgage insurer practices, and changes in the financial stability of correspondent lenders.