MORTGAGE LOAN SALES AND SERVICING RIGHTS
|12 Months Ended|
Dec. 31, 2019
|Transfers and Servicing [Abstract]|
|MORTGAGE LOAN SALES AND SERVICING RIGHTS||
Residential Mortgage Portfolio
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended December 31, 2019, 2018, and 2017:
The following table summarizes the changes in MSRs recorded using the amortization method for the years ended December 31, 2019 and 2018:
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 highly sensitive to movement in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which can be greatly impacted by the level of prepayments.
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, 2019, and 2018 follows:
Additionally, Huntington held MSRs recorded using the fair value method of $7 million and $10 million at December 31, 2019 and 2018, respectively. The change in fair value representing time decay, payoffs and changes in valuation inputs and assumptions for the years ended December 31, 2019 and 2018 was $3 million and $1 million, respectively.
Total servicing, late and other ancillary fees included in mortgage banking income was $63 million, $60 million, and $56 million for the years ended December 31, 2019, 2018, and 2017, respectively. The unpaid principal balance of residential mortgage loans serviced for third parties was $22.4 billion, $21.0 billion, and $19.8 billion at December 31, 2019, 2018, and 2017, respectively.
The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef