Receivables (Tables)

6 Months Ended

Jun. 30, 2015

Receivables consisted of the following:



	June 30, 2015			December 31, 2014
	(in millions)
Real estate secured:
First lien	$	8,235		$	20,153
Second lien	2,072			2,517
Total real estate secured receivables	10,307			22,670
Accrued interest income and other	150			789
Credit loss reserve for receivables	(408		)	(2,217		)
Total receivables, net	$	10,049		$	21,242

Aging Analysis of Past Due Loans

The following tables summarize the past due status of our receivables at June 30, 2015 and December 31, 2014. The aging of past due amounts is determined based on the contractual delinquency status of payments made under the terms of the receivable. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status is affected by customer account management policies and practices such as re-aging.



	Past Due				Total Past Due				Total Receivables⁽²⁾
June 30, 2015	30 – 89 days		90+ days		Total Past Due		Current⁽¹⁾		Total Receivables⁽²⁾
	(in millions)
Real estate secured:
First lien	$	202	$	242	$	444	$	7,791	$	8,235
Second lien	107		66		173		1,899		2,072
Total real estate secured receivables	$	309	$	308	$	617	$	9,690	$	10,307



	Past Due				Total Past Due				Total Receivables⁽²⁾
December 31, 2014	30 – 89 days		90+ days		Total Past Due		Current⁽¹⁾		Total Receivables⁽²⁾
	(in millions)
Real estate secured:
First lien	$	1,572	$	902	$	2,474	$	17,679	$	20,153
Second lien	165		100		265		2,252		2,517
Total real estate secured receivables	$	1,737	$	1,002	$	2,739	$	19,931	$	22,670


⁽¹⁾	Receivables less than 30 days past due are presented as current.

⁽²⁾

The receivable balances included in this table reflects the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies and includes certain basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. However, these basis adjustments on the loans are excluded in other presentations of dollars of two-months-and-over contractual delinquency, nonaccrual receivable and nonperforming receivable account balances.

Nonaccrual Receivables

Nonaccrual receivables and nonaccrual receivables held for sale consisted of the following:



	June 30, 2015		December 31, 2014
	(in millions)
Nonaccrual receivable portfolios⁽¹⁾:
Real estate secured⁽²⁾	$	320	$	1,024
Receivables held for sale⁽³⁾	806		509
Total nonaccrual receivables⁽⁴⁾	$	1,126	$	1,533

⁽¹⁾

The receivable balances included in this table reflects the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies but excludes any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. Additionally, the balances in this table related to receivables which have been classified as held for sale have been reduced by the lower of amortized cost or fair value adjustment recorded as well as the credit loss reserves associated with these receivables prior to the transfer.


⁽²⁾	At June 30, 2015 and December 31, 2014, nonaccrual real estate secured receivables held for investment include $208 million and $417 million, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽³⁾	For a discussion of the movements between the components of nonaccrual receivables, see Note 5, "Receivables Held for Sale," which includes discussion of the expansion of our receivable sales program in the second quarter of 2015.


⁽⁴⁾	Nonaccrual receivables do not include receivables totaling $499 million and $627 million at June 30, 2015 and December 31, 2014, respectively, which have been written down to the lower of amortized cost or fair value of the collateral less cost to sell which are less than 90 days contractually delinquent and not accruing interest.

Additional Information on Nonaccrual Receivables

The following table provides additional information on our total nonaccrual receivables:



Six Months Ended June 30,	2015		2014
	(in millions)
Interest income that would have been recorded if the nonaccrual receivable had been current in accordance with contractual terms during the period	$	81	$	176
Interest income that was recorded on nonaccrual receivables included in interest income on nonaccrual loans during the period	19		31

Receivables Classified as Trouble Debt Restructuring Loans

The following table presents information about receivables and receivables held for sale which as a result of any account management action taken during the three and six months ended June 30, 2015 and 2014 became classified as TDR Loans.



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Real estate secured:
First lien	$	17	$	169	$	142	$	394
Second lien	12		23		28		51
Real estate secured receivables held for sale	77		25		87		44
Total⁽¹⁾	$	106	$	217	$	257	$	489


⁽¹⁾	The following table summarizes the actions taken during the three and six months ended June 30, 2015 and 2014 which resulted in the above receivables being classified as a TDR Loan.



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Modifications, primarily interest rate modifications	$	40	$	80	$	100	$	164
Re-age of past due account	66		137		157		325
Total	$	106	$	217	$	257	$	489

During the first quarter of 2015, it was determined that loan balances totaling $160 million previously reported as modifications in the table above during the first quarter of 2014 should have been reported as a re-age. Accordingly, the modification and re-age information presented in the table above for the six months ended June 30, 2014 has been adjusted to reflect the corrected classification. The total amounts reported remain unchanged.

TDR Loans

Receivables and receivables held for sale reported as TDR Loans are summarized in the table below. The trends reflected in this table reflect the impact of the transfer of additional receivables to held for sale as a result of the expansion of the receivable sales program as the majority of the receivables transferred to held for sale were previously classified as TDR Loans.



	June 30, 2015		December 31, 2014
	(in millions)
TDR Loans:⁽¹⁾⁽²⁾
Real estate secured:
First lien⁽³⁾	$	1,043	$	9,630
Second lien⁽³⁾	698		915
Real estate secured receivables held for sale⁽⁴⁾	7,433		650
Total real estate secured TDR Loans	$	9,174	$	11,195

Credit loss reserves for TDR Loans:⁽⁵⁾
Real estate secured:
First lien	$	139	$	1,738
Second lien	159		244
Total credit loss reserves for real estate secured TDR Loans⁽⁴⁾	$	298	$	1,982


⁽¹⁾	TDR Loans are considered to be impaired loans regardless of accrual status.


⁽²⁾	The following table reflects the unpaid principal balance of TDR Loans:



	June 30, 2015		December 31, 2014
	(in millions)
Real estate secured:
First lien	$	1,187	$	9,931
Second lien	792		1,050
Real estate secured receivables held for sale	9,358		1,004
Total real estate secured TDR Loans	$	11,337	$	11,985

At June 30, 2015 and December 31, 2014, the unpaid principal balances reflected above include $683 million and $549 million, respectively, which have received a reduction in the unpaid principal balance as part of an account management action.


⁽³⁾	At June 30, 2015 and December 31, 2014, TDR Loans held for investment totaling $256 million and $517 million, respectively, are recorded at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽⁴⁾	There are no credit loss reserves associated with receivables classified as held for sale as they are carried at the lower of amortized cost or fair value.


⁽⁵⁾	Included in credit loss reserves.

Receivables Classified as Trouble Debt Restructuring Loan

The following table discloses receivables and receivables held for sale which were classified as TDR Loans during the previous 12 months which subsequently became sixty days or greater contractually delinquent during the three and six months ended June 30, 2015 and 2014.



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Real estate secured:
First lien	$	7	$	94	$	62	$	236
Second lien	5		14		14		31
Real estate secured receivables held for sale	37		7		39		23
Total	$	49	$	115	$	115	$	290

Additional Information Relating to Trouble Debt Restructuring Loan

The following table provides additional information relating to TDR Loans, including TDR Loans held for sale:



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Average balance of TDR Loans:
Real estate secured:
First lien	$	9,715	$	11,722	$	9,972	$	11,856
Second lien	864		985		884		1,010
Total average balance of TDR Loans	$	10,579	$	12,707	$	10,856	$	12,866
Interest income recognized on TDR Loans:
Real estate secured:
First lien	$	175	$	200	$	355	$	406
Second lien	22		24		44		49
Total interest income recognized on TDR Loans	$	197	$	224	$	399	$	455

Summary of Contractual Delinquency and Delinquency Ratio

The following table summarizes dollars of two-months-and-over contractual delinquency and as a percent of total receivables and receivables held for sale (“delinquency ratio”) for our loan portfolio. As previously discussed, in June 2015 we expanded our receivable sales program and transferred receivables with a carrying value of $11,399 million, including accrued interest, to held for sale during the second quarter of 2015 which creates a lack of comparability between dollars of contractual delinquency and the delinquency ratio between periods.



	June 30, 2015				December 31, 2014
	Dollars of Delinquency		Delinquency Ratio		Dollars of Delinquency		Delinquency Ratio
	(dollars are in millions)
Real estate secured receivables⁽¹⁾:
First lien	$	302	3.67	%	$	1,388	6.89	%
Second lien	101		4.87		154		6.12
Real estate secured receivables held for sale	1,108		10.75		530		61.63
Total real estate secured receivables⁽²⁾	$	1,511	7.33	%	$	2,072	8.81	%

⁽¹⁾

The receivable balances included in this table reflects the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies but excludes any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. Additionally, the balances in this table related to receivables which have been classified as held for sale have been reduced by the lower of amortized cost or fair value adjustment recorded as well as the credit loss reserves associated with these receivables prior to the transfer.


⁽²⁾	At June 30, 2015 and December 31, 2014, total real estate secured receivables includes $615 million and $745 million, respectively, that are in the process of foreclosure.

Nonperforming Consumer Receivable Portfolio

The following table summarizes the status of receivables and receivables held for sale.



	Accruing Loans		Nonaccrual Loans⁽⁴⁾		Total
	(in millions)
At June 30, 2015⁽¹⁾
Real estate secured⁽²⁾⁽³⁾	$	9,987	$	320	$	10,307
Real estate secured receivables held for sale	9,504		806		10,310
Total	$	19,491	$	1,126	$	20,617
At December 31, 2014⁽¹⁾
Real estate secured⁽²⁾⁽³⁾	$	21,646	$	1,024	$	22,670
Real estate secured receivables held for sale	351		509		860
Total	$	21,997	$	1,533	$	23,530


⁽¹⁾	The receivable balances included in this table reflect the current carrying amount of the loan excluding certain basis adjustments to the loan such as deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased receivables.


⁽²⁾	At June 30, 2015 and December 31, 2014, nonaccrual real estate secured receivables held for investment include $208 million and $417 million, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽³⁾	At June 30, 2015 and December 31, 2014, nonaccrual real estate secured receivables held for investment include $197 million and $739 million, respectively, of TDR Loans, some of which may also be carried at fair value of the collateral less cost to sell.


⁽⁴⁾	Nonaccrual loans do not include receivables totaling $499 million and $627 million at June 30, 2015 and December 31, 2014, respectively, which have been written down to the lower of amortized cost or fair value of the collateral less cost to sell which are less than 90 days contractually delinquent and not accruing interest.