Commitments, Contingencies and Guarantees (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Unpaid Principal Balance of Mortgage Loans Originated and Sold to Third Parties Based on Category of Purchaser

The following table presents the original principal balance of mortgage loan originations, by vintage for 2005 through 2008, for the three general categories of purchasers of mortgage loans and the estimated outstanding principal balance as of September 30, 2013 and December 31, 2012:

Table 14.1: Unpaid Principal Balance of Mortgage Loans Originated and Sold to Third Parties Based on Category of Purchaser (UPB is estimated)


	Unpaid Principal Balance				Original Unpaid Principal Balance
(Dollars in billions)	September 30, 2013		December 31, 2012		Total		2008		2007		2006		2005
Government sponsored enterprises (“GSEs”)⁽¹⁾	$	3	$	4	$	11	$	1	$	4	$	3	$	3
Insured Securitizations		5		5		20		0		2		8		10
Uninsured Securitizations and Other		19		23		80		3		15		30		32

Total	$	27	$	32	$	111	$	4	$	21	$	41	$	45

⁽¹⁾	GSEs include Fannie Mae and Freddie Mac.

Schedule of Open Claims in Pipeline

The following table presents information on pending repurchase requests by counterparty category and timing of initial repurchase request. The amounts presented are based on original loan principal balances.

Table 14.2: Open Pipeline All Vintages (all entities)⁽¹⁾


(Dollars in millions) (All amounts are Original Principal Balance)	GSEs			Insured Securitizations			Uninsured Securitizations and Other			Total
Open claims as of December 31, 2011	$	176		$	1,243		$	672		$	2,091
Gross new demands received		189			366			291			846
Loans repurchased/made whole		(233	)		(3	)		(138	)		(374	)
Demands rescinded		(75	)		(30	)		(40	)		(145	)
Reclassifications⁽²⁾		2			3			(4	)		1

Open claims as of December 31, 2012	$	59		$	1,579		$	781		$	2,419

Gross new demands received		121			40			191			352
Loans repurchased/made whole		(40	)		(5	)		(20	)		(65	)
Demands rescinded		(94	)		0			(21	)		(115	)

Open claims as of September 30, 2013	$	46		$	1,614		$	931		$	2,591

⁽¹⁾

The open pipeline includes all repurchase requests ever received by our subsidiaries where either the requesting party has not formally rescinded the repurchase request and where our subsidiary has not agreed to either repurchase the loan at issue or make the requesting party whole with respect to its losses. Accordingly, repurchase requests denied by our subsidiaries and not pursued by the counterparty remain in the open pipeline, with the exception of certain aged repurchase requests submitted by parties without contractual standing to pursue such requests, which may be removed from the pipeline. Finally, the amounts reflected in this chart are the original principal balance amounts of the mortgage loans at issue and do not correspond to the losses our subsidiary would incur upon the repurchase of these loans.

⁽²⁾

Represents adjustments to correct the counterparty category as of December 31, 2012 for amounts that were misclassified. The reclassification had no impact on the total pending repurchase requests; however, it resulted in an increase in open claims attributable to GSEs and Insured Securitizations and a decrease in open claims attributable to Uninsured Securitizations and Other.

Schedule of Changes in Representation and Warranty Reserves

The following table summarizes changes in our representation and warranty reserves for the three and nine months ended September 30, 2013 and 2012, and for full year 2012:

Table 14.3: Changes in Representation and Warranty Reserves


	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	2013			2012			2013			2012
Representation and warranty repurchase reserve, beginning of period⁽¹⁾	$	1,156		$	1,002		$	899		$	943
Provision for mortgage representation and warranty losses⁽²⁾		(4	)		0			276			349
Net realized losses		(7	)		(83	)		(30	)		(373	)

Representation and warranty repurchase reserve, end of period⁽¹⁾	$	1,145		$	919		$	1,145		$	919

⁽¹⁾	Reported in our consolidated balance sheets as a component of other liabilities.

⁽²⁾

The pre-tax portion of the provision for mortgage representation and warranty losses recognized in our condensed consolidated statements of income as a component of non-interest income was a benefit of $13 million and $27 million in the third quarter and first nine months of 2013, respectively compared with a loss of $42 million in the first nine months of 2012. The portion of the provision for mortgage representation and warranty recognized in our consolidated statements of income as a component of discontinued operations totaled $9 million and $303 million in the third quarter and first nine months of 2013, respectively and $307 million in first nine months of 2012.

Schedule of Allocation of Representation and Warranty Reserves

As indicated in the table below, most of the reserves relate to the $27 billion in original principal balance of mortgage loans sold directly to the GSEs or to the Active Insured Securitizations.

Table 14.4: Allocation of Representation and Warranty Reserves


	Reserve Liability
(Dollars in millions, except for loans sold)	September 30, 2013		December 31, 2012		Loans Sold 2005 to 2008⁽¹⁾
Selected period-end data:
GSEs and Active Insured Securitizations	$	970	$	817	$	27
Inactive Insured Securitizations and Others		175		82		84

Total	$	1,145	$	899	$	111

⁽¹⁾	Reflects, in billions, the total original principal balance of mortgage loans originated by our subsidiaries and sold to third party investors between 2005 and 2008.