Quarterly report pursuant to Section 13 or 15(d)

MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)

v3.19.3
MORTGAGE LOAN SALES AND SERVICING RIGHTS (Tables)
9 Months Ended
Sep. 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 nine-month periods ended September 30, 2019 and 2018:
 

Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(dollar amounts in millions)
 
2019
 
2018
 
2019
 
2018
Residential mortgage loans sold with servicing retained
 
$
1,238

 
$
1,047

 
$
3,025

 
$
2,787

Pretax gains resulting from above loan sales (1)
 
26

 
24

 
61

 
64

(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 nine-month periods ended September 30, 2019 and 2018:
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(dollar amounts in millions)
 
2019
 
2018
 
2019
 
2018
Carrying value, beginning of period
 
$
184

 
$
204

 
$
211

 
$
191

New servicing assets created
 
12

 
12

 
31

 
32

Impairment (charge) recovery
 
(11
)
 

 
(38
)
 
7

Amortization
 
(13
)
 
(8
)
 
(32
)
 
(22
)
Carrying value, end of period
 
$
172

 
$
208

 
$
172

 
$
208

Fair value, end of period
 
$
172

 
$
222

 
$
172

 
$
222

Weighted-average life (years)
 
4.9

 
7.1

 
4.9

 
7.1


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 September 30, 2019, and December 31, 2018 follows:
 
September 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)
15.60
%
 
 
$
(8
)
 
$
(15
)
 
9.40
%
 
 
$
(6
)
 
$
(12
)
Spread over forward interest rate swap rates
889

bps
 
(5
)
 
(9
)
 
934

bps
 
(7
)
 
(13
)