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Mortgage Banking Operations (Tables)
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3 Months Ended |
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Mar. 31, 2015
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| Mortgage Banking [Abstract] |
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| Loans held for sale and sold |
Loans held for sale consisted of the following. | | | | | | | | | (in thousands) | At March 31,
2015 | | At December 31,
2014 | | | | | Single family | $ | 856,123 |
| | $ | 610,350 |
| Multifamily | 9,199 |
| | 10,885 |
| | $ | 865,322 |
| | $ | 621,235 |
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Loans sold consisted of the following. | | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Single family | $ | 1,316,959 |
| | $ | 619,913 |
| Multifamily | 26,173 |
| | 6,263 |
| | $ | 1,343,132 |
| | $ | 626,176 |
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| Net gain on mortgage loan origination and sale activity |
Net gain on mortgage loan origination and sale activities, including the effects of derivative risk management instruments, consisted of the following. | | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Single family: | | | | Servicing value and secondary market gains(1) | $ | 56,289 |
| | $ | 19,559 |
| Loan origination and funding fees | 4,455 |
| | 4,761 |
| Total single family | 60,744 |
| | 24,320 |
| Multifamily | 939 |
| | 396 |
| Other | 204 |
| | 794 |
| Total net gain on mortgage loan origination and sale activities | $ | 61,887 |
| | $ | 25,510 |
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| | (1) | Comprised of gains and losses on interest rate lock commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and changes in the Company's repurchase liability for loans that have been sold. |
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| Company's portfolio of loans serviced for others |
The composition of loans serviced for others is presented below at the unpaid principal balance.
| | | | | | | | | (in thousands) | At March 31,
2015 | | At December 31,
2014 | | | | | Single family | | | | U.S. government and agency | $ | 11,275,491 |
| | $ | 10,630,864 |
| Other | 634,763 |
| | 585,344 |
| | 11,910,254 |
| | 11,216,208 |
| Commercial | | | | Multifamily | 773,092 |
| | 752,640 |
| Other | 83,574 |
| | 82,354 |
| | 856,666 |
| | 834,994 |
| Total loans serviced for others | $ | 12,766,920 |
| | $ | 12,051,202 |
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| Mortgage Repurchase Losses [Table Text Block] |
The following is a summary of changes in the Company's liability for estimated mortgage repurchase losses.
| | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Balance, beginning of period | $ | 1,956 |
| | $ | 1,260 |
| Additions (1) | 487 |
| | 239 |
| Realized losses (2) | (332 | ) | | (357 | ) | Balance, end of period | $ | 2,111 |
| | $ | 1,142 |
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| | (1) | Includes additions for new loan sales and changes in estimated probable future repurchase losses on previously sold loans. |
| | (2) | Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants and certain related expense. |
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| Revenue from mortgage servicing, including the effects of derivative risk management instruments |
Revenue from mortgage servicing, including the effects of derivative risk management instruments, consisted of the following. | | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Servicing income, net: | | | | Servicing fees and other | $ | 9,063 |
| | $ | 9,849 |
| Changes in fair value of single family MSRs due to modeled amortization (1) | (9,235 | ) | | (5,968 | ) | Amortization of multifamily MSRs | (454 | ) | | (424 | ) | | (626 | ) | | 3,457 |
| Risk management, single family MSRs: | | | | Changes in fair value due to changes in model inputs and/or assumptions (2) | (7,311 | ) |
| (5,409 | ) | Net gain (loss) from derivatives economically hedging MSR | 12,234 |
| | 9,897 |
| | 4,923 |
| | 4,488 |
| Mortgage servicing income | $ | 4,297 |
| | $ | 7,945 |
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| | (1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
| | (2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
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| Key economic assumptions used in measuring the initial value of capitalized single family MSRs created from loan sales with retained servicing Key economic assumptions used in measuring the initial value of capitalized single family MSRs created from loan sales with retained servicing. |
Key economic assumptions used in measuring the initial fair value of capitalized single family MSRs were as follows. | | | | | | | | Three Months Ended March 31, | (rates per annum) (1) | 2015 | | 2014 | | | | | Constant prepayment rate ("CPR") (2) | 16.13 | % | | 11.39 | % | Discount rate | 10.32 | % | | 10.42 | % |
| | (1) | Weighted average rates for sales during the period for sales of loans with similar characteristics. |
| | (2) | Represents the expected lifetime average. |
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| Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block] |
Key economic assumptions and the sensitivity of the current fair value for single family MSRs to immediate adverse changes in those assumptions were as follows.
| | | | | (dollars in thousands) | At March 31, 2015 | | | Fair value of single family MSR | $ | 110,709 |
| Expected weighted-average life (in years) | 4.15 |
| Constant prepayment rate (1) | 20.23 | % | Impact on 25 basis points adverse change | $ | (8,686 | ) | Impact on 50 basis points adverse change | $ | (17,112 | ) | Discount rate | 10.60 | % | Impact on fair value of 100 basis points increase | $ | (2,885 | ) | Impact on fair value of 200 basis points increase | $ | (5,628 | ) |
| | (1) | Represents the expected lifetime average. |
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| Changes in single family MSRs measured at fair value |
The changes in single family MSRs measured at fair value are as follows. | | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Beginning balance | $ | 112,439 |
| | $ | 153,128 |
| Originations | 14,813 |
| | 7,893 |
| Purchases | 3 |
| | 2 |
| Changes due to modeled amortization(1) | (9,235 | ) | | (5,968 | ) | Net additions and amortization | 5,581 |
| | 1,927 |
| Changes in fair value due to changes in model inputs and/or assumptions (2) | (7,311 | ) | | (5,409 | ) | Ending balance | $ | 110,709 |
| | $ | 149,646 |
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| | (1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
| | (2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
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| Changes in multifamily MSRs measured at the lower of amortized cost or fair value |
The changes in multifamily MSRs measured at the lower of amortized cost or fair value were as follows. | | | | | | | | | | Three Months Ended March 31, | (in thousands) | 2015 | | 2014 | | | | | Beginning balance | $ | 10,885 |
| | $ | 9,335 |
| Origination | 582 |
| | 183 |
| Amortization | (454 | ) | | (423 | ) | Ending balance | $ | 11,013 |
| | $ | 9,095 |
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| Projected amortization expense for the gross carrying value of multifamily MSRs |
Projected amortization expense for the gross carrying value of multifamily MSRs is estimated as follows. | | | | | (in thousands) | At March 31, 2015 | | | Remainder of 2015 | $ | 1,354 |
| 2016 | 1,709 |
| 2017 | 1,586 |
| 2018 | 1,429 |
| 2019 | 1,319 |
| 2020 and thereafter | 3,616 |
| Carrying value of multifamily MSR | $ | 11,013 |
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