Annual report pursuant to Section 13 and 15(d)

MORTGAGE LOAN SALES AND SERVICING RIGHTS

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MORTGAGE LOAN SALES AND SERVICING RIGHTS
 12 Months Ended
Dec. 31, 2024
Transfers and Servicing [Abstract]  
MORTGAGE LOAN SALES AND SERVICING RIGHTS MORTGAGE LOAN SALES AND SERVICING RIGHTS
Residential Mortgage Portfolio
The following table summarizes activity relating to residential mortgage loans sold with servicing retained.
  
Year Ended December 31,
(dollar amounts in millions) 2024 2023 2022
Residential mortgage loans sold with servicing retained $ 4,124  $ 4,109  $ 5,686 
Pretax gains resulting from above loan sales (1) 78  58  137 
Total servicing, late, and other ancillary fees (1)
 104  98  91 
(1)Included in mortgage banking income.
The following table summarizes the changes in MSRs recorded using the fair value method.
Year Ended December 31,
(dollar amounts in millions) 2024 2023
Fair value, beginning of period $ 515  $ 494 
New servicing assets created 54  63 
Servicing assets sold
 (1) (1)
Change in fair value during the period due to:
Time decay (1) (25) (24)
Payoffs (2) (30) (24)
Changes in valuation inputs or assumptions (3) 60  7 
Fair value, end of period $ 573  $ 515 
Loans serviced for third parties, unpaid principal balance, end of period
 $ 33,696  $ 33,237 
(1)Represents decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.
(2)Represents decrease in value associated with loans that paid off during the period.
(3)Represents change in value resulting primarily from market-driven changes in interest rates.
MSRs do not trade in an active, open market with readily observable prices. Therefore, the fair value of MSRs is estimated using a discounted future cash flow model. Changes in the assumptions used may have a significant impact on the valuation of MSRs. MSR values are sensitive to movement in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which are impacted by the level of prepayments.
A summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions follows.
At December 31, 2024 At December 31, 2023
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)
7.54  % $ (14) $ (28) 8.61  % $ (15) $ (28)
Spread over forward interest rate swap rates 568  bps (13) (26) 538  bps (11) (22)