Annual report pursuant to Section 13 and 15(d)

MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)

v3.10.0.1
MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)
 12 Months Ended
Dec. 31, 2018
Transfers and Servicing [Abstract]  
Schedule of activity relating to loans securitized sold with servicing rights
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended December 31, 2018, 2017, and 2016:
  
Year Ended December 31,
(dollar amounts in millions)
2018
 
2017
 
2016
Residential mortgage loans sold with servicing retained
$
3,846

 
$
3,985

 
$
3,632

Pretax gains resulting from above loan sales (1)
87

 
99

 
97

(1)
Recorded in mortgage banking income.
Servicing asset at amortized cost
(dollar amounts in millions)
2018
 
2017
Carrying value, beginning of year
$
191

 
$
172

New servicing assets created
44

 
44

Impairment recovery (charge)
6

 
1

Amortization and other
(30
)
 
(26
)
Carrying value, end of year
$
211

 
$
191

Fair value, end of year
$
212

 
$
191

Weighted-average life (years)
6.7

 
7.1

Summary of key assumptions and the sensitivity analysis of servicing rights
 
 
 
 
 
 
 
 
 
 
 
 
For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at December 31, 2018, and 2017 follows:
 
December 31, 2018
 
December 31, 2017
 
 
 
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)
9.40
%
 
$
(6
)
 
$
(12
)
 
8.30
%
 
$
(5
)
 
$
(10
)
Spread over forward interest rate swap rates
934
 bps
 
(7
)
 
(13
)
 
1,049
 bps
 
(7
)
 
(13
)