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Loan Servicing
 12 Months Ended
Dec. 31, 2012
Loan Servicing [Abstract]  
Loan Servicing

NOTE 7. Loan Servicing

Residential Mortgage Banking Activities

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

    December 31, 
    2012 2011 
          
    (Dollars in millions) 
 Mortgage loans managed or securitized (1) $ 29,882 $ 26,559 
 Less: Loans securitized and transferred to securities available for sale  4   4 
  LHFS  3,547   3,394 
  Covered mortgage loans   1,040   1,264 
  Mortgage loans sold with recourse   1,019   1,316 
 Mortgage loans held for investment $ 24,272 $ 20,581 
 Mortgage loans on nonaccrual status$ 269 $ 308 
 Mortgage loans 90 days or more past due and still accruing interest (2)   92   104 
 Mortgage loans net charge-offs - year to date  133   264 
 Unpaid principal balance of residential mortgage loans servicing portfolio  101,270   91,640 
 Unpaid principal balance of residential mortgage loans serviced for others  73,769   67,066 
 Maximum recourse exposure from mortgage loans sold with recourse liability  446   522 
 Recorded reserves related to recourse exposure  12   6 
 Repurchase reserves for mortgage loan sales to GSEs  59   29 
          
          
(1)Balances exclude loans serviced for others with no other continuing involvement.
(2)Includes amounts related to residential mortgage LHFS and excludes amounts related to government guaranteed loans and covered mortgage loans. Refer to the Loans and Leases Note for additional disclosures related to past due government guaranteed loans.

    As Of / For The  
    Years Ended December 31, 
    2012 2011 
            
    (Dollars in millions)  
 Unpaid principal balance of residential mortgage loans sold from the held for         
  sale portfolio$ 25,640  $ 17,202  
 Pre-tax gains recognized on mortgage loans sold and held for sale  539    175  
 Servicing fees recognized from mortgage loans serviced for others  247    240  
 Approximate weighted average servicing fee on 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  4.59    5.02  

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 years ended December 31, 2012 and 2011, BB&T sold residential mortgage loans from the held for sale portfolio and recognized pre-tax gains including marking LHFS 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 MSRs and receives servicing fees.

At December 31, 2012 and 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 December 31, 2012 and 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 GSEs. 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 MSRs are primarily 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 MSRs. The following is an analysis of the activity in BB&T's residential MSRs:

      Years Ended December 31, 
      2012 2011 2010 
               
      (Dollars in millions) 
 Carrying value, January 1, $ 563 $ 830 $ 832 
  Additions   270   225   265 
  Change in fair value due to changes in valuation inputs or assumptions:         
   Prepayment speeds  19   (284)   (66) 
   Weighted average OAS  (36)   (20)   (28) 
   Servicing costs  (22)   (30)   (44) 
   Other  7   (7)   ― 
  Other changes (1)   (174)   (151)   (129) 
 Carrying value, December 31,$ 627 $ 563 $ 830 
               
 Gains (losses) on derivative financial instruments used to mitigate the         
  income statement effect of changes in fair value$ 128 $ 394 $ 196 
               
               
(1)Represents the realization of expected net servicing cash flows, expected borrower payments and the passage of time.

During 2012, the prepayment speed assumptions were updated as actual prepayments have slowed relative to modeled projections as interest rates have begun to stabilize and the higher coupon, faster prepaying mortgage loans were refinanced over the past two years. Management also increased its OAS assumption to reflect the return that management believes a market participant would require in the current market. The servicing costs assumptions have also been increased due to the expectation of higher costs that continued to impact the industry.

At December 31, 2012, the valuation of MSRs was based on prepayment speeds ranging from 15.3% to 18.5% and OAS ranging from 8.22% to 8.35%. The sensitivity of the current fair value of the residential MSRs to immediate 10% and 20% adverse changes in key economic assumptions is included in the accompanying table:

    December 31, 
    2012 2011 
            
    (Dollars in millions) 
 Fair value of residential MSRs$ 627  $ 563  
 Composition of residential loans serviced for others:        
  Fixed-rate mortgage loans   99%   99% 
  Adjustable-rate mortgage loans   1    1  
   Total   100%   100% 
 Weighted average life   4.4yrs   3.7yrs 
            
 Prepayment speed   17.3%   20.8% 
  Effect on fair value of a 10% increase $ (35)  $ (35)  
  Effect on fair value of a 20% increase   (67)    (66)  
            
 Weighted average OAS  8.3%   6.9% 
  Effect on fair value of a 10% increase $ (17)  $ (12)  
  Effect on fair value of a 20% increase   (33)    (23)  

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 MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another, which may magnify or counteract the effect of the change.

Commercial Mortgage Banking Activities

CRE 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:

     December 31, 
     2012 2011 
           
     (Dollars in millions) 
 Unpaid principal balance of CRE mortgages serviced for others$ 29,520 $ 25,367 
 CRE mortgages serviced for others covered by recourse provisions  4,970   4,520 
 Maximum recourse exposure from CRE mortgages       
  sold with recourse liability  1,368   1,226 
 Recorded reserves related to recourse exposure  13   15 
 Originated CRE mortgages during the period - year to date  4,934   4,803