Mortgage Banking Activities (Tables)

3 Months Ended

Mar. 31, 2012

Mortgage Banking Activities (Tables) [Abstract]

Changes In Mortgage Servicing Rights Carried at Fair Value



					Quarter ended March 31,
(in millions)						2012	2011
Fair value, beginning of period					$	12,603	14,467
	Servicing from securitizations or asset transfers (1)					1,776	1,262
	Changes in fair value:
		Due to changes in valuation model inputs or assumptions:
			Mortgage interest rates (2)			147	506
			Servicing and foreclosure costs (3)			(54)	(214)
			Discount rates (4)			(344)	(150)
			Prepayment estimates and other (5)			93	357
				Net changes in valuation model inputs or assumptions		(158)	499
		Other changes in fair value (6)				(643)	(580)
			Total changes in fair value			(801)	(81)
Fair value, end of period					$	13,578	15,648

Quarter ended March 31, 2012, includes $315 million residential MSRs transferred from amortized MSRs that we elected to carry at fair value effective January 1, 2012.
Primarily represents prepayment speed changes due to changes in mortgage interest rates, but also includes other valuation changes due to changes in mortgage interest rates (such as changes in estimated interest earned on custodial deposit balances).
Includes costs to service and unreimbursed foreclosure costs.
Reflects discount rate assumption change, excluding portion attributable to changes in mortgage interest rates; the first quarter 2012 change reflects increased capital return requirements from market participants.
Represents changes driven by other valuation model inputs or assumptions including prepayment speed estimation changes and other assumption updates. Prepayment speed estimation changes are influenced by observed changes in borrower behavior.
Represents changes due to collection/realization of expected cash flows over time.

Changes In Amortized Mortgage Servicing Rights



			Quarter ended March 31,
(in millions)			2012	2011
Balance, beginning of period		$	1,445	1,422
	Purchases		14	45
	Servicing from securitizations or asset transfers (1)		(327)	29
	Amortization		(58)	(64)
Balance, end of period (2)			1,074	1,432
Valuation allowance:
Balance, beginning of period			(37)	(3)
	Reversal of provision (provision) for MSRs in excess of fair value (1)		37	(6)
Balance, end of period (3)			-	(9)
Amortized MSRs, net		$	1,074	1,423
Fair value of amortized MSRs:
	Beginning of period	$	1,756	1,812
	End of period (4)		1,263	1,898

Quarter ended March 31, 2012, is net of $350 million ($313 million after valuation allowance) of residential MSRs that we elected to carry at fair value effective January 1, 2012. A cumulative adjustment of $2 million to fair value was recorded in retained earnings at January 1, 2012.
Includes $390 million in residential amortized MSRs with amortization of $(10) million at March 31, 2011.
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 $9 million was recorded on the residential amortized MSRs at March 31, 2011. For quarter ended March 31, 2012, valuation allowance of $37 million for residential MSRs was reversed upon election to carry at fair value.
Includes fair value of $445 million in residential amortized MSRs and $1,453 million in commercial amortized MSRs at March 31, 2011. The March 31, 2012 balance is all commercial amortized MSRs.

Components of Managed Servicing Portfolio



					Mar. 31,		Dec. 31,
(in billions)					2012		2011
Residential mortgage servicing:
	Serviced for others			$	1,483		1,456
	Owned loans serviced				350		358
	Subservicing				7		8
		Total residential servicing			1,840		1,822
Commercial mortgage servicing:
	Serviced for others				407		398
	Owned loans serviced				106		106
	Subservicing				13		14
		Total commercial servicing			526		518
			Total managed servicing portfolio	$	2,366		2,340
Total serviced for others				$	1,890		1,854
Ratio of MSRs to related loans serviced for others					0.77	%	0.76

Components of Mortgage Banking Noninterest Income



						Quarter ended March 31,
(in millions)							2012	2011
Servicing income, net:
	Servicing fees:
		Contractually specified servicing fees				$	1,148	1,145
		Late charges					66	94
		Ancillary fees					77	89
		Unreimbursed direct servicing costs (1)					(280)	(191)
			Net servicing fees				1,011	1,137
	Changes in fair value of MSRs carried at fair value:
		Due to changes in valuation model inputs or assumptions (2)					(158)	499
		Other changes in fair value (3)					(643)	(580)
			Total changes in fair value of MSRs carried at fair value				(801)	(81)
	Amortization						(58)	(64)
	Provision for MSRs in excess of fair value						-	(6)
	Net derivative gains (losses) from economic hedges (4)						100	(120)
				Total servicing income, net			252	866
Net gains on mortgage loan origination/sales activities							2,618	1,150
					Total mortgage banking noninterest income	$	2,870	2,016
Market-related valuation changes to MSRs, net of hedge results (2) + (4)						$	(58)	379

Primarily associated with foreclosure expenses and other interest costs.
Refer to the changes in fair value MSRs table in this Note for more detail.
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 12 – Free-Standing Derivatives for additional discussion and detail.

Liability for Mortgage Loan Repurchase Losses



				Quarter ended March 31,
(in millions)					2012	2011
Balance, beginning of period				$	1,326	1,289
	Provision for repurchase losses:
		Loan sales			62	35
		Change in estimate (1)			368	214
			Total additions		430	249
	Losses				(312)	(331)
Balance, end of period				$	1,444	1,207

Results from such factors as credit deterioration, changes in investor demand and mortgage insurer practices, and changes in the financial stability of correspondent lenders.

- Definition

Tabular disclosure of the activity in the balance of servicing assets subsequently measured at amortized value (including a description of where changes in carrying value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (through purchases of servicing assets and servicing assets that result from transfers of financial assets), disposals, amortization, application of valuation allowances, other-than-temporary impairments, and other changes that affect the balance along with a description of those changes.

+ References+ Details

- Definition

Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes.

+ References+ Details