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Mortgage Banking Activities (Tables)
 9 Months Ended
Sep. 30, 2015
Mortgage Banking Activities [Abstract]  
Changes In Mortgage Servicing Rights Carried at Fair Value
The changes in MSRs measured using the fair value method were:
 
  
Quarter ended Sep 30,
 
 
Nine months ended Sep 30,
 
(in millions)
2015

 
2014

 
2015

 
2014

Fair value, beginning of period
$
12,661

 
13,900

 
12,738

 
15,580

Servicing from securitizations or asset transfers
448

 
340

 
1,184

 
900

Sales and other (1)
6

 
—

 
—

 
—

Net additions
454

 
340

 
1,184

 
900

Changes in fair value:
  
 
  
 
  
 
  
Due to changes in valuation model inputs or assumptions:
  
 
  
 
  
 
  
Mortgage interest rates (2)
(858
)
 
251

 
(313
)
 
(1,134
)
Servicing and foreclosure costs (3)
(18
)
 
(4
)
 
(46
)
 
(15
)
Discount rates (4)
—

 
—

 
—

 
(55
)
Prepayment estimates and other (5)
43

 
6

 
(194
)
 
181

Net changes in valuation model inputs or assumptions
(833
)
 
253

 
(553
)
 
(1,023
)
Other changes in fair value (6)
(504
)
 
(462
)
 
(1,591
)
 
(1,426
)
Total changes in fair value
(1,337
)
 
(209
)
 
(2,144
)
 
(2,449
)
Fair value, end of period
$
11,778

 
14,031

 
11,778

 
14,031

(1)
Includes sales and transfers of MSRs, which can result in an increase of total reported MSRs if the sales or transfers are related to nonperforming loan portfolios.
(2)
Includes prepayment speed changes as well as other valuation changes due to changes in mortgage interest rates (such as changes in estimated interest earned on custodial deposit balances).
(3)
Includes costs to service and unreimbursed foreclosure costs.
(4)
Reflects discount rate assumption change, excluding portion attributable to changes in mortgage interest rates.
(5)
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 and other external factors that occur independent of interest rate changes.
(6)
Represents changes due to collection/realization of expected cash flows over time.
Changes In Amortized Mortgage Servicing Rights
The changes in amortized MSRs were:
 
  
Quarter ended Sep 30,
 
 
Nine months ended Sep 30,
 
(in millions)
2015

 
2014

 
2015

 
2014

Balance, beginning of period
$
1,262

 
1,196

 
1,242

 
1,229

Purchases
45

 
47

 
96

 
119

Servicing from securitizations or asset transfers
35

 
29

 
131

 
67

Amortization
(65
)
 
(48
)
 
(192
)
 
(191
)
Balance, end of period (1)
$
1,277

 
1,224

 
1,277

 
1,224

Fair value of amortized MSRs:
  
 
  
 
  
 
  
Beginning of period
$
1,692

 
1,577

 
1,637

 
1,575

End of period
1,643

 
1,647

 
1,643

 
1,647

(1)
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.
Components of Managed Servicing Portfolio
We present the components of our managed servicing portfolio in the following table at unpaid principal balance for loans serviced and subserviced for others and at book value for owned loans serviced.
 
(in billions)
Sep 30, 2015

 
Dec 31, 2014

Residential mortgage servicing:
  

 
  

Serviced for others
$
1,323

 
1,405

Owned loans serviced
346

 
342

Subserviced for others
4

 
5

Total residential servicing
1,673

 
1,752

Commercial mortgage servicing:
  
 
  
Serviced for others
470

 
456

Owned loans serviced
121

 
112

Subserviced for others
7

 
7

Total commercial servicing
598

 
575

Total managed servicing portfolio
$
2,271

 
2,327

Total serviced for others
$
1,793

 
1,861

Ratio of MSRs to related loans serviced for others
0.73
%
 
0.75
Components of Mortgage Banking Noninterest Income
The components of mortgage banking noninterest income were: 
  
 
Quarter ended Sep 30,
 
 
Nine months ended Sep 30,
 
(in millions)
 
2015

 
2014

 
2015

 
2014

Servicing income, net:
 
 
 
 
 
 
 
 
Servicing fees:
 
 
 
 
 
 
 
 
Contractually specified servicing fees
 
$
1,001

 
1,058

 
3,029

 
3,217

Late charges
 
48

 
49

 
147

 
153

Ancillary fees
 
69

 
74

 
221

 
241

Unreimbursed direct servicing costs (1)
 
(128
)
 
(262
)
 
(371
)
 
(494
)
Net servicing fees
 
990

 
919

 
3,026

 
3,117

Changes in fair value of MSRs carried at fair value:
 
 
 
 
 
 
 
 
Due to changes in valuation model inputs or assumptions (2)
(A)
(833
)
 
253

 
(553
)
 
(1,023
)
Other changes in fair value (3)
 
(504
)
 
(462
)
 
(1,591
)
 
(1,426
)
Total changes in fair value of MSRs carried at fair value
 
(1,337
)
 
(209
)
 
(2,144
)
 
(2,449
)
Amortization
 
(65
)
 
(48
)
 
(192
)
 
(191
)
Net derivative gains from economic hedges (4)
(B)
1,086

 
17

 
1,021

 
2,175

Total servicing income, net
 
674

 
679

 
1,711

 
2,652

Net gains on mortgage loan origination/sales activities
 
915

 
954

 
3,130

 
2,214

Total mortgage banking noninterest income
 
$
1,589

 
1,633

 
4,841

 
4,866

Market-related valuation changes to MSRs, net of hedge results (2)(4)
(A)+(B)
$
253

 
270

 
468

 
1,152

(1)
Primarily associated with foreclosure expenses and unreimbursed interest advances to investors.
(2)
Refer to the changes in fair value of MSRs table in this Note for more detail.
(3)
Represents changes due to collection/realization of expected cash flows over time.
(4)
Represents results from economic hedges used to hedge the risk of changes in fair value of MSRs. See Note 12 (Derivatives Not Designated as Hedging Instruments) for additional discussion and detail.
Liability for Mortgage Loan Repurchase Losses
The table below summarizes the changes in our liability for mortgage loan repurchase losses. This liability is in “Accrued expenses and other liabilities” in our consolidated balance sheet and the provision for repurchase losses reduces net gains on mortgage loan origination/sales activities in “Mortgage banking” in our consolidated income statement.
Because of the uncertainty in the various estimates underlying the mortgage repurchase liability, there is a range of losses in excess of the recorded mortgage repurchase liability that is reasonably possible. The estimate of the range of possible loss for representations and warranties does not represent a probable loss, and is based on currently available information, significant judgment, and a number of assumptions that are subject to change. The high end of this range of reasonably possible losses was $928 million in excess of our recorded liability at September 30, 2015, and was determined based upon modifying the assumptions (particularly to assume significant changes in investor repurchase demand practices) used in our best estimate of probable loss to reflect what we believe to be the high end of reasonably possible adverse assumptions.
 
  
Quarter ended Sep 30,
 
 
Nine months ended Sep 30,
 
(in millions)
2015

 
2014

 
2015

 
2014

Balance, beginning of period
$
557

 
766

 
615

 
899

Provision for repurchase losses:
 
 
 
 
 
 
 
Loan sales
11

 
12

 
34

 
34

Change in estimate (1)
(17
)
 
(93
)
 
(74
)
 
(135
)
Net additions (reductions)
(6
)
 
(81
)
 
(40
)
 
(101
)
Losses
(13
)
 
(16
)
 
(37
)
 
(129
)
Balance, end of period
$
538

 
669

 
538

 
669

(1)
Results from changes in investor demand, mortgage insurer practices, credit and the financial stability of correspondent lenders.