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Mortgage Banking Activities (Tables)
 3 Months Ended
Mar. 31, 2013
Mortgage Banking Activities (Tables) [Abstract]  
Changes In Mortgage Servicing Rights Carried at Fair Value
        
     Quarter ended March 31,
(in millions)   2013 2012
Fair value, beginning of period$ 11,538 12,603
 Servicing from securitizations or asset transfers (1)  935 1,776
 Sales  (423) -
  Net additions  512 1,776
 Changes in fair value:   
  Due to changes in valuation model inputs or assumptions:   
    Mortgage interest rates (2)  1,030 147
    Servicing and foreclosure costs (3)  (58) (54)
    Discount rates (4)  - (344)
    Prepayment estimates and other (5)  (211) 93
    Net changes in valuation model inputs or assumptions  761 (158)
  Other changes in fair value (6)  (750) (643)
   Total changes in fair value  11 (801)
Fair value, end of period$ 12,061 13,578
        

  • 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 that occur independent of interest rate changes.
  • Represents changes due to collection/realization of expected cash flows over time.
Changes In Amortized Mortgage Servicing Rights
       
     Quarter ended March 31,
(in millions)  2013 2012
Balance, beginning of period$ 1,160 1,445
 Purchases  27 14
 Servicing from securitizations or asset transfers (1)  56 (327)
 Amortization  (62) (58)
Balance, end of period  1,181 1,074
Valuation allowance:   
Balance, beginning of period  - (37)
 Reversal of provision for MSRs in excess of fair value  - 37
Balance, end of period (2)  - -
Amortized MSRs, net$ 1,181 1,074
Fair value of amortized MSRs (3):   
 Beginning of period$ 1,400 1,756
 End of period  1,404 1,263
       
       

  • 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.
  • 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. For quarter ended March 31, 2012, valuation allowance of $37 million for residential MSRs was reversed upon election to carry at fair value.
  • Represent commercial amortized MSRs. The beginning of period balance for quarter ended March 31, 2012 also includes fair value of $316 million in residential amortized MSRs.
Components of Managed Servicing Portfolio
         
         
      Mar. 31, Dec. 31,
(in billions)   2013  2012
Residential mortgage servicing:    
 Serviced for others$ 1,486  1,498
 Owned loans serviced  367  368
 Subservicing  7  7
  Total residential servicing  1,860  1,873
Commercial mortgage servicing:    
 Serviced for others  404  408
 Owned loans serviced  106  106
 Subservicing  14  13
  Total commercial servicing  524  527
   Total managed servicing portfolio$ 2,384  2,400
Total serviced for others$ 1,890  1,906
Ratio of MSRs to related loans serviced for others  0.70% 0.67
         
Components of Mortgage Banking Noninterest Income
          
       Quarter ended March 31,
(in millions)  2013 2012
Servicing income, net:   
 Servicing fees    
  Contractually specified servicing fees$ 1,125 1,148
  Late charges  60 66
  Ancillary fees  82 77
  Unreimbursed direct servicing costs (1)  (270) (280)
   Net servicing fees  997 1,011
 Changes in fair value of MSRs carried at fair value:   
  Due to changes in valuation model inputs or assumptions (2)  761 (158)
  Other changes in fair value (3)  (750) (643)
   Total changes in fair value of MSRs carried at fair value  11 (801)
 Amortization  (62) (58)
 Net derivative gains (losses) from economic hedges (4)  (632) 100
    Total servicing income, net  314 252
Net gains on mortgage loan origination/sales activities  2,480 2,618
     Total mortgage banking noninterest income$ 2,794 2,870
Market-related valuation changes to MSRs, net of hedge results (2) + (4)$ 129 (58)
          
          

  • Primarily associated with foreclosure expenses and other interest costs.
  • Refer to the changes in fair value of 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)  2013 2012
Balance, beginning of period$ 2,206 1,326
 Provision for repurchase losses:   
  Loan sales  59 62
  Change in estimate (1)  250 368
   Total additions  309 430
 Losses  (198) (312)
Balance, end of period$ 2,317 1,444
        

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