Quarterly report pursuant to Section 13 or 15(d)

MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)

v3.19.2
MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)
 6 Months Ended
Jun. 30, 2019
Transfers and Servicing [Abstract]  
Summarizes activity relating to loans securitized sold with servicing retained
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the three-month and six-month periods ended June 30, 2019 and 2018:
 

Three Months Ended
June 30,
 
Six Months Ended
June 30,
(dollar amounts in millions)
 
2019
 
2018
 
2019
 
2018
Residential mortgage loans sold with servicing retained
 
$
954

 
$
897

 
$
1,787

 
$
1,740

Pretax gains resulting from above loan sales (1)
 
23

 
19

 
35

 
40

(1)
Recorded in mortgage banking income.
Summarizes activity relating to loans sold with servicing retained using the amortization method
The following table summarizes the changes in MSRs recorded using the amortization method for the three-month and six-month periods ended June 30, 2019 and 2018:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(dollar amounts in millions)
 
2019
 
2018
 
2019
 
2018
Carrying value, beginning of period
 
$
202

 
$
200

 
$
211

 
$
191

New servicing assets created
 
10

 
11

 
19

 
20

Impairment (charge) recovery
 
(18
)
 
—

 
(27
)
 
7

Amortization
 
(10
)
 
(7
)
 
(19
)
 
(14
)
Carrying value, end of period
 
$
184

 
$
204

 
$
184

 
$
204

Fair value, end of period
 
$
184

 
$
212

 
$
184

 
$
212

Weighted-average life (years)
 
5.5

 
7.0

 
5.5

 
7.0


Summary of key assumptions and the sensitivity of the servicing rights value to changes in the assumptions
For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at June 30, 2019, and December 31, 2018 follows:
 
June 30, 2019
 
December 31, 2018
 
 
 
 
Decline in fair value due to
 
 
 
 
Decline in fair value due to
(dollar amounts in millions)
Actual
 
10%
adverse
change
 
20%
adverse
change
 
Actual
 
10%
adverse
change
 
20%
adverse
change
Constant prepayment rate (annualized)
13.70
%
 
 
$
(7
)
 
$
(14
)
 
9.40
%
 
 
$
(6
)
 
$
(12
)
Spread over forward interest rate swap rates
894

bps
 
(5
)
 
(11
)
 
934

bps
 
(7
)
 
(13
)