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v3.24.3

Assets Held for Sale and Associated Liabilities (Tables) | 9 Months Ended
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Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Schedule of Assets and Liabilities Related to the Sale | A summary of these items are shown below:
(in millions) |  |
|  | September 30, 2024
Mortgage servicing rights |  | $ | 1,105 |
Loans |  | 465 |
Other assets |  | 61 |
Assets held for sale |  | $ | 1,631 |
Other liabilities |  | $ | 471 |
Liabilities associated with assets held for sale |  | $ | 471 |
Schedule of Changes in the Fair Value of Residential First Mortgage MSRs | Changes in the fair value of residential first mortgage servicing rights ("MSRs") were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Balance at beginning of period | $ | 1,122 |  |  | $ | 1,031 |  |  | $ | 1,111 |  |  | $ | 1,033 |
Additions from loans sold with servicing retained | 58 |  |  | 67 |  |  | 158 |  |  | 148 |
Reductions from sales | — |  |  | — |  |  | (69) |  |  | (51) |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) | (31) |  |  | (20) |  |  | (91) |  |  | (54) |
Changes in estimates of fair value due to interest rate risk (1) (2) | (44) |  |  | 57 |  |  | (4) |  |  | 59 |
Fair value of MSRs at end of period | $ | 1,105 |  |  | $ | 1,135 |  |  | $ | 1,105 |  |  | $ | 1,135 |
(1)Changes in fair value are included within net return on mortgage servicing rights on the Consolidated Statements of Income and Comprehensive Income. (2)Represents estimated MSR value change resulting primarily from market-driven changes which we manage through the use of derivatives.
Schedule of Adverse Changes to Weighted-Average Assumptions on the Fair Value of Servicing Rights | The following table summarizes the hypothetical effect on fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets:
| September 30, 2024
|  | Fair Value
(dollars in millions) | Actual | 10% adverse change | 20% adverse change
Option adjusted spread | 5.0 | % | $ | (20) |  | $ | (38) |
Constant prepayment rate | 8.3 | % | (46) |  | (87) |
Weighted average cost to service per loan | $ | 68 |  | $ | (11) |  | $ | (22) |
| December 31, 2023
|  | Fair Value
(dollars in millions) | Actual | 10% adverse change | 20% adverse change
Option adjusted spread | 5.4 | % | $ | (20) |  | $ | (39) |
Constant prepayment rate | 7.9 | % | (37) |  | (71) |
Weighted average cost to service per loan | $ | 69 |  | $ | (10) |  | $ | (21) |
Schedule of Income and Fees | The following table summarizes income and fees associated with owned mortgage servicing rights:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Net return on mortgage servicing rights |  |  |  |  |  |  |
Servicing fees, ancillary income and late fees (1) | $ | 60 |  |  | $ | 59 |  |  | $ | 176 |  |  | $ | 169 |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes and other | (31) |  |  | (20) |  |  | (91) |  |  | (54) |
Changes in fair value due to interest rate risk | (44) |  |  | 57 |  |  | (4) |  |  | 59 |
Gain on MSR derivatives (2) | 48 |  |  | (73) |  |  | (7) |  |  | (105) |
Net transaction costs | 1 |  |  | — |  |  | — |  |  | 1 |
Total return (loss) included in net return on mortgage servicing rights | $ | 34 |  |  | $ | 23 |  |  | $ | 74 |  |  | $ | 70 |
(1)Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis. (2)Changes in the derivatives utilized as economic hedges to offset changes in fair value of the mortgage servicing rights. The following table summarizes income and fees associated with our mortgage loans subserviced for others:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Loan administration income on mortgage loans subserviced |  |  |  |  |  |  |
Servicing fees, ancillary income and late fees (1) | $ | 34 |  |  | $ | 42 |  |  | $ | 104 |  |  | $ | 116 |
Charges on subserviced custodial balances (2) | (47) |  | (55) |  | (125) |  | (124)
Other servicing charges | — |  | (1) |  | 2 |  | (3)
Total income (loss) on mortgage loans subserviced, included in loan administration income | $ | (13) |  |  | $ | (14) |  |  | $ | (19) |  |  | $ | (11) |
(1)Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis. (2)Charges on subserviced custodial balances represent interest due to MSR owner.

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- Definition Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 3 -SubTopic 10 -Topic 360 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482099/360-10-50-3 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 45 -Paragraph 11 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483475/205-20-45-11 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 3A -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-3A Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4A -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-4A Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4B -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-4B Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5A -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-5A Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5B -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-5B Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-5C Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5D -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-5D Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-7 Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3A -Publisher FASB -URI https://asc.fasb.org/1943274/2147482099/360-10-50-3A Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -SubTopic 20 -Topic 205 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-1 Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483499/205-20-50-3 + Details
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- Definition Tabular disclosure of a sensitivity analysis or stress test showing the hypothetical effect on the fair value of the transferor's interests in transferred financial assets (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported, independently determined from any change in another key assumption, and a description of the objectives, methodology, and limitations of the sensitivity analysis or stress test. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 860 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481326/860-20-50-4 + Details
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- Definition Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 860 -SubTopic 50 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481229/860-50-50-3 + Details
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