BB&T 2013 Annual Report Download - page 113

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113
NOTE 6. Loan Servicing
Residential Mortgage Banking Activities
The following tables summarize residential mortgage banking activities for the periods presented:
December 31,
2013 2012
(Dollars in millions)
Mortgage loans managed or securitized (1) $ 27,353 $ 29,882
Less: Loans securitized and transferred to AFS securities 4 4
LHFS 1,116 3,547
Covered mortgage loans 802 1,040
Mortgage loans sold with recourse 783 1,019
Mortgage loans held for investment $ 24,648 $ 24,272
Mortgage loans on nonaccrual status $ 243 $ 269
Mortgage loans 90 days or more past due and still accruing interest (2) 69 92
Mortgage loans net charge-offs - year to date 78 133
UPB of residential mortgage loan servicing portfolio 112,835 101,362
UPB of residential mortgage loans serviced for others (primarily agency conforming
fixed rate) 87,434 73,769
Maximum recourse exposure from mortgage loans sold with recourse liability 372 446
Recorded reserves related to recourse exposure 13 12
Repurchase reserves for mortgage loan sales to GSEs 59 59
(1) Balances exclude loans serviced for others with no other continuing involvement.
(2) Includes amounts related to residential mortgage LHFS and excludes amounts related to government guaranteed loans
and covered mortgage loans.
As Of / For The
Year Ended December 31,
2013 2012 2011
(Dollars in millions)
UPB of residential mortgage loans sold from the LHFS portfolio $ 28,900 $ 25,640 $ 17,202
Pre-tax gains recognized on mortgage loans sold and held for sale 292 539 175
Servicing fees recognized from mortgage loans serviced for others 259 247 240
Approximate weighted average servicing fee on the outstanding balance
of residential mortgage loans serviced for others 0.30 % 0.32 % 0.34 %
Weighted average interest rate on mortgage loans serviced for others 4.24 4.59 5.02
Gains on residential mortgage loan sales, including marking LHFS to fair value and the impact of interest rate lock
commitments, are recorded in noninterest income as a component of mortgage banking income. For certain of these
transactions, the loan servicing rights were retained, including the related MSRs and on-going servicing fees.
Payments made to date for recourse exposure on residential mortgage loans sold with recourse liability have been immaterial.
BB&T also issues standard representations and warranties related to mortgage loan sales to GSEs. Although these
agreements often do not specify limitations, management does not believe that any payments related to these warranties
would materially change the financial condition or results of operations of BB&T.
Residential MSRs are recorded on the Consolidated Balance Sheets at fair value with changes in fair value recorded as a
component of mortgage banking income in the Consolidated Statements of Income. Various derivative instruments are used
to mitigate the income statement effect of changes in fair value due to changes in valuation inputs and assumptions of its
residential MSRs.