The following tables summarize residential mortgage banking activities for the periods presented:

			September 30,		December 31,
			2012		2011

			(Dollars in millions)
	Mortgage loans managed or securitized (1)		$	29,809	$	26,559
	Less: Loans securitized and transferred to securities available for sale			4		4
		Loans held for sale		3,321		3,394
		Covered mortgage loans		1,106		1,264
		Mortgage loans sold with recourse		1,085		1,316
	Mortgage loans held for investment		$	24,293	$	20,581
	Mortgage loans on nonaccrual status		$	266	$	308
	Mortgage loans 90 days or more past due and still accruing interest (2)			80		104
	Mortgage loans net charge-offs - year to date			105		264
	Unpaid principal balance of residential mortgage loans servicing portfolio			99,537		91,640
	Unpaid principal balance of residential mortgage loans serviced for others			72,343		67,066
	Maximum recourse exposure from mortgage loans sold with recourse liability			466		522
	Recorded reserves related to recourse exposure			13		6
	Repurchase reserves for mortgage loan sales to GSEs			58		29


(1)	Balances exclude loans serviced for others with no other continuing involvement.
(2)	Includes amounts related to residential mortgage loans held for sale and excludes amounts related to government guaranteed loans and covered mortgage loans. Refer to Loans and Leases Note for additional disclosures related to past due government guaranteed loans.

		As of / For the
		Nine Months Ended September 30,
		2012			2011

		(Dollars in millions)
Unpaid principal balance of residential mortgage loans sold from the held for
	sale portfolio	$	18,680		$	11,961
Pre-tax gains recognized on mortgage loans sold and held for sale			380			109
Servicing fees recognized from mortgage loans serviced for others			182			179
Approximate weighted average servicing fee of the outstanding balance of
	residential mortgage loans serviced for others		0.32	%		0.34	%
Weighted average coupon interest rate on mortgage loans serviced for others			4.71			5.10

The unpaid principal balances of BB&T's total residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans. Mortgage loans serviced for others are not included in loans and leases on the accompanying Consolidated Balance Sheets.

During the nine months ended September 30, 2012 and 2011, BB&T sold residential mortgage loans from the held for sale portfolio and recognized pre-tax gains including marking loans held for sale to fair value and the impact of interest rate lock commitments. These gains are recorded in noninterest income as a component of mortgage banking income. BB&T retained the related mortgage servicing rights and receives servicing fees.

At September 30, 2012 and December 31, 2011, BB&T had residential mortgage loans sold with recourse liability. In the event of nonperformance by the borrower, BB&T has recourse exposure for these loans. At both September 30, 2012 and December 31, 2011, BB&T has recorded reserves related to these recourse exposures. Payments made to date have been immaterial.

BB&T also issues standard representations and warranties related to mortgage loan sales to government-sponsored entities. Although these agreements often do not specify limitations, BB&T does not believe that any payments related to these warranties would materially change the financial condition or results of operations of BB&T.

Residential mortgage servicing rights are recorded on the Consolidated Balance Sheets at fair value with changes in fair value recorded as a component of mortgage banking income in the Consolidated Statements of Income for each period. BB&T uses various derivative instruments to mitigate the income statement effect of changes in fair value due to changes in valuation inputs and assumptions of its residential mortgage servicing rights. The following is an analysis of the activity in BB&T's residential mortgage servicing rights:

					Residential Mortgage Servicing Rights
					Nine Months Ended September 30,
						2012		2011

					(Dollars in millions)
	Carrying value, January 1,				$	563	$	830
		Additions				195		165
		Increase (decrease) in fair value:
				Due to changes in valuation inputs or assumptions		(67)		(319)
			Other changes (1)			(128)		(103)
	Carrying value, September 30,				$	563	$	573


(1)	Represents the realization of expected net servicing cash flows, expected borrower payments and the passage of time.

During the nine months ended September 30, 2012, management revised its servicing costs assumptions in the valuation of residential mortgage servicing rights due to the expectation of higher costs that continue to impact the industry. The impact of these changes resulted in a $22 million reduction in the value of the residential mortgage servicing rights. The remainder of the net decrease is primarily due to the impact of an increase in discount rates, which is reflective of the current mortgage servicing rights market.

Refer to Note 14 for additional disclosures related to the assumptions and estimates used in determining the fair value of residential mortgage servicing rights. The sensitivity of the current fair value of the residential mortgage servicing rights to immediate 10% and 20% adverse changes in key economic assumptions is included in the accompanying table:

			Residential
			Mortgage Servicing Rights
			September 30, 2012

			(Dollars in millions)
Fair value of residential mortgage servicing rights				$	563
Composition of residential loans serviced for others:
	Fixed-rate mortgage loans				99	%
	Adjustable-rate mortgage loans				1
		Total			100	%
Weighted average life					3.9	yrs

Prepayment speed					19.6	%
	Effect on fair value of a 10% increase			$	(35)
	Effect on fair value of a 20% increase				(66)

Weighted average discount rate					10.6	%
	Effect on fair value of a 10% increase			$	(19)
	Effect on fair value of a 20% increase				(37)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the above table, the effect of an adverse variation in a particular assumption on the fair value of the mortgage servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change.

BB&T also arranges and services commercial real estate mortgages through Grandbridge Real Estate Capital, LLC (“Grandbridge”) the commercial mortgage banking subsidiary of Branch Bank. The majority of these commercial mortgages were arranged for third party investors. Commercial real estate mortgage loans serviced for others are not included in loans and leases on the accompanying Consolidated Balance Sheets. The following table summarizes commercial mortgage banking activities for the periods presented:

		September 30,		December 31,
		2012		2011

		(Dollars in millions)
Unpaid principal balance of commercial real estate mortgages serviced for others		$	25,982	$	25,367
Commercial real estate mortgages serviced for others covered by recourse provisions			4,847		4,520
Maximum recourse exposure from commercial real estate mortgages
	sold with recourse liability		1,327		1,226
Recorded reserves related to recourse exposure			14		15
Originated commercial real estate mortgages during the period - year to date			3,342		4,803