Quarterly report pursuant to Section 13 or 15(d)

MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)

v3.21.1
MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)
3 Months Ended
Mar. 31, 2021
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 periods ended March 31, 2021 and 2020:
Three Months Ended
March 31,
(dollar amounts in millions) 2021 2020
Residential mortgage loans sold with servicing retained $ 2,256  $ 1,428 
Pretax gains resulting from above loan sales (1) 93  39 
(1)Recorded in mortgage banking income
Summarizes activity relating to loans sold with servicing retained using the fair value method
The following table summarizes the changes in MSRs recorded using the fair value method for the three-month periods ended March 31, 2021 and 2020 (1):
Three Months Ended
March 31,
(dollar amounts in millions) 2021 2020 (1)
Fair value, beginning of period $ 210  $
Fair value election for servicing assets previously measured using the amortized method —  205 
New servicing assets created 33  14 
Change in fair value during the period due to:
Time decay (2) (3) (2)
Payoffs (3) (17) (6)
Changes in valuation inputs or assumptions (4) 51  (53)
Fair value, end of period $ 274  $ 165 
Weighted-average life (years) 7.0 6.4
(1)Prior to January 1, 2020, substantially all of Huntington’s MSR assets were recorded at amortized cost.
(2)Represents decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.
(3)Represents decrease in value associated with loans that paid off during the period.
(4)Represents change in value resulting primarily from market-driven changes in interest rates.
Summary of key assumptions and the sensitivity of the servicing rights value to changes in the assumptions
For MSRs under the fair value method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at March 31, 2021, and December 31, 2020 follows:
March 31, 2021 December 31, 2020 (1)
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)
12.30  % $ (15) $ (28) 17.36  % $ (12) $ (23)
Spread over forward interest rate swap rates 509  bps (6) (12) 519  bps (4) (8)
(1)Prior to January 1, 2020, substantially all of Huntington’s MSR assets were recorded at amortized cost.