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Income from mortgage banking activities includes gains and losses from the sale of mortgage loans, revenue
from servicing mortgage loans, valuation adjustments for mortgage servicing rights, mortgage servicing rights-
related derivative gains/losses and the amortization or realization of expected mortgage servicing rights cash
flows. Mortgage banking income totaled $658 million, $275 million and $115 million during 2009, 2008 and 2007,
respectively. The following table provides a breakdown of the various components of mortgage banking income
and related statistical information:
Table 19
Mortgage Banking Income and Related Statistical Information
As of/ For the Years
Ended December 31,
% Change
2009
v.
2008
2008
v.
2007Mortgage Banking Income 2009 2008 2007
(Dollars in millions)
Residential Mortgage Banking:
Residential mortgage production income $ 457 $ 127 $ 47 259.8% 170.2%
Residential Mortgage Servicing:
Residential mortgage servicing fees 190 145 114 31.0 27.2
Residential mortgage servicing rights increase (decrease) in fair value
due to change in valuation inputs or assumptions 190 (220) (60)
Mortgage servicing rights hedging (losses) gains (98) 262 64
Net 92 42 4 119.0 NM
Realization of expected residential mortgage servicing rights cash flows (126) (94) (90) 34.0 4.4
Total residential mortgage servicing income 156 93 28 67.7 232.1
Total residential mortgage banking income 613 220 75 178.6 193.3
Commercial Mortgage Banking:
Commercial mortgage banking revenues 63 69 46 (8.7) 50.0
Amortization of commercial mortgage servicing rights (18) (14) (6) 28.6 133.3
Total commercial mortgage banking income 45 55 40 (18.2) 37.5
Total mortgage banking income $ 658 $ 275 $115 139.3 139.1
NM = not meaningful
As of/ For the Years
Ended December 31,
% Change
2009
v.
2008
2008
v.
2007Mortgage Banking Statistical Information 2009 2008 2007
(Dollars in millions)
Residential mortgage originations $28,183 $16,438 $11,940 71.5% 37.7%
Residential mortgage loans serviced for others 54,523 40,677 32,093 34.0 26.7
Residential mortgage loan sales 25,773 13,405 7,547 92.3 77.6
Commercial mortgage originations 2,342 3,717 3,012 (37.0) 23.4
Commercial mortgage loans serviced for others 24,253 23,902 20,752 1.5 15.2
Mortgage banking income increased $383 million, or 139.3%, during 2009. This increase includes the net
change in the mortgage servicing rights valuation, which resulted in an increase of $50 million compared to 2008.
Mortgage banking income for 2008 included certain one-time items associated with the implementation of fair
value accounting standards that benefited results by approximately $23 million. Excluding the impact of these
items, mortgage banking income increased $356 million compared to the same period last year. The growth in
mortgage banking income is primarily attributable to record production revenues from residential mortgage
banking operations, including $28.2 billion in mortgage loan originations during 2009 compared to $16.4 billion
during 2008. Mortgage banking income increased $160 million, or 139.1%, during 2008. This increase was
primarily due to a change in accounting standards, which resulted in an increase of $74 million compared to 2007.
Of the $74 million increase relating to the adoption of new accounting standards, approximately $55 million
relates to the elimination of recognizing the cost of originating loans as a reduction in revenues and resulted in a
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